Principles of Sustainable Business
Frameworks for Corporate Action on the SDGs
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The basic function of companies is to add value to society. Profits are a means to an end, not an end in itself. The ability of companies to innovate, scale and invest provides them with a powerful base for positive change. But companies are also criticized for not contributing sufficiently to society’s grand challenges. An increasingly VUCA (Volatile, Uncertain, Complex and Ambiguous) world creates serious governance gaps that not only require new ways of regulation, but also new ways of doing business. Can companies effectively contribute to sustainable development and confront society’s systemic challenges?
Arguably the most important frame to drive this ambition was introduced and unanimously adopted in 2015: the Sustainable Development Goals (SDGs). The SDG-agenda not only defines a holistic set of global goals and targets, but also foundational principles to guide meaningful action to their achievement by 2030. Multinational companies have signed up to the SDGs as the world’s long-term business plan. Realizing the SDGs provides a yearly $12 trillion investment and growth opportunity, while creating hundreds of millions of jobs in the process. But progress is too slow – witnessing society’s inability to deal with pressing human, ecological, economic and health crises – whilst the vast potential for societal value creation remains underutilized. This book provides a timely account of the systemic, strategic and operational challenges that need to be addressed to enhance the effectiveness of corporate involvement in society, by using the SDGs as the leading principles-based framework for actionable, powerful and transformative change.
Principles of Sustainable Business is written for graduate and postgraduate (executive) students, policymakers and business professionals who want to understand the complex challenges of global sustainability. It shows how companies can design and implement SDG-relevant strategies at three levels: the macro level, to assess whether the SDGs present wicked problems or opportunities; the micro level, to develop and operationalize innovative business models, design new business cases and navigate organizational transition trajectories; and the meso level, to develop fit-for-purpose cross-sector partnering strategies. Principles of Sustainable Business presents innovative tools embedded in a coherent sequence of analytical frameworks that can be applied in courses for students, be put into practice by business professionals and used by action researchers to help companies contribute to the Decade of Action.
Table of Contents
Part I: WHY? SYSTEMIC PRINCIPLES 1 Why now? A necessary frame for grand societal challenges; 2 Why not? Understanding the potential of the SDGs; 3 Why slow? Conditions for realizing the SDGs; Part II: WHAT AND WHO? SOCIETAL AND DYNAMIC PRINCIPLES 4 What if? The SDGs as wicked problems; 5 What and who? The SDGs as wicked opportunities; 6 Who? The governance challenge; Part III: HOW? STRATEGIC AND OPERATIONAL PRINCIPLES 7 Making it resilient – dealing with triggering events; 8 Making it strategic – business cases for sustainability; 9 Making it material – designing sustainable business models; 10 Making it powerful – using power as a force for positive change; 11 Making it functional – the internal alignment challenge; 12 Making it collaborative – the partnership challenge
Rob van Tulder is full professor of International Business at RSM Erasmus University, co-founder of the Department of Business-Society Management (one of the world’s leading capacity groups on teaching and research in sustainable business). He is academic director of the Partnerships Resource Centre, acclaimed author of more than 20 books on Sustainable Development and Multinational Enterprises, and advisor to many companies, governments, international organizations and NGOs.
Eveline van Mil is strategic advisor to (semi-)public, private and non-profit organizations on societal interface management. Her practical experience and research projects range from ‘wicked problems’, societal governance, transition theory and issue and stakeholder management to the ‘resource curse’, sustainable production and consumption, and regulation of controversial sectors.
"The SDGs provide a moral framework at the time the world needs it most. It is also the world’s best long-term business plan. It’s the unlock to what is the growth story of our century, putting people and the planet first. But the implementation is in need of a ‘booster shot’. Principles of Sustainable Business presents state-of-the-art science-based answers on how to achieve this ambition in the Decade of Action. The detailed elaborations of business models, transition trajectories and partnering strategies provide actionable targets for companies that want to drive systems change."
Paul Polman, Former CEO Unilever, Co-chair and founder IMAGINE, Vice Chair UN Global Compact
"Achieving the SDGs requires an all of society effort, including the vital role of the private sector. While progress has been made, serious challenges still remain to fully realize the private sector's power and dynamism. This book is an important contribution by providing valuable insights and practical examples of how companies can achieve greater impact towards a better world."
Ban Ki-moon, Eighth Secretary-General of the United Nations
"This book is a truly inspiring collection of proven tools and frameworks to motivate global and local business leaders to make their businesses contribute to achieve a world that is more fair, just and environmentally sustainable. Principles of Sustainable Business is an amazing resource for business practitioners, business school educators and students to drive the urgently needed systems change to help companies adopt the Sustainable Development Goals and create the world we want. And very timely, it is co-authored by a business school educator and a business practitioner, Rob van Tulder and Eveline van Mil."
Dr. Mette Morsing, Head of PRME Principles for Responsible Management Education, United Nations Global Compact
"Our world is facing three pressing global challenges: the climate emergency, the loss of nature and growing inequality. As risks associated with these challenges continue to build, we need business leaders to rally behind a bold and urgent agenda for transformation. The SDGs provide a unique lens through which to translate global needs and ambitions into tangible business solutions, and this book provides insights to support companies in this effort. With a solid overview of resources available, it presents new techniques and tools to walk the talk."
Peter Bakker, President & CEO, World Business Council for Sustainable Development (WBCSD)
"Whether you are an executive, economist, or future business leader, Principles of Sustainable Business will be a comprehensive guide to why companies are increasingly taking action on the sustainable development goals, and how they can do so. It is eloquently written, yet academically rigorous."
Prof. Klaus Schwab, President and founder of the World Economic Forum
"This book is a must read for anyone who craves for inspiration on how to turn companies into a force for positive change. Reaching the Sustainable Development Goals is a matter of commitment, of owning a strong moral compass and of 21st Century Leadership. And books like this is fuel for these visionary leadership skills. But the book is more than that. It brings clarity in the alphabet soup. And, more importantly, it takes key international concepts, standards (such as my own organization the Global Reporting Initiative and the GRI standards) and tools in the arena of sustainability, responsible business and ESG, analyses them critically and scientifically in their potential and shortcomings and then boldly and innovatively improves, enriches and even transforms them into a next level. Take the example of ‘materiality’, which is turned into the concept of ‘reversed materiality’, to capture a more forward-looking angle. This is a book that deserves a spot on your desk where you can read it time and again. You will find yourself turning to it when you need to revisit a certain idea. It will help all of us sharpen our mind, and focus on what needs to be done by each of us to build a better world through the Sustainable Development Goals."
Teresa C. Fogelberg, Former Climate Change Director, Women’s Rights Director, Research Director at the Netherlands Ministries of Foreign Affairs and Environment, Co-Founder and Deputy Chief Executive of the Global Reporting Initiative
"In Africa, we place a high premium on the private sector as a critical engine of growth for the continent. This outstanding book offers excellent insight into how the corporate world can impact positive change – change for the Africa we want and more broadly at a global level, as we strive to bring the SDGs to fruition."
Dr. Akinwumi Adesina, President African Development Bank and World Food Prize Laureate
"The Decade of Action needs serious acceleration. The intentions are still there, but the realization requires sophisticated approaches of governments, civil society and companies alike. The frameworks offered by this all-encompassing book provide the badly needed road map for the coming years. A truly amazing achievement!"
Prof. dr. Jan Peter Balkenende, former Prime Minister of the Netherlands, chair Dutch Sustainable Growth Coalition
"Sustainability is easy to talk about, but we all know it is much harder to deliver. As this comprehensive guide makes clear, addressing our most pressing societal and environmental issues will require deep organizational transformation. That change must be led from the top. CEOs and boards now face an unprecedented opportunity to embed sustainability across strategy, operations, and leadership cultures. We welcome this timely roadmap to making this transition."
Constantine Alexandrakis, CEO Russell Reynolds Associates
"Principles of Sustainable Business of Rob van Tulder and Eveline van Mil describes in depth why and how businesses should and can be purposeful by creating economic, societal and ecological value at the same time. The authors recognize the importance how frontrunner companies in the past have been able to break through a number of the critical tipping points to uplift sustainability and contribute to systems change. Sustainability should be anchored in the core of the business and the SDGs could provide a very relevant framework for companies to define where to contribute. The frameworks developed in this book make it possible for (aspiring) leaders to ‘walk the talk’."
Feike Sijbesma, former CEO DSM, Chair Supervisory Board Philips, member Supervisory Board Unilever
"Principles of Sustainable Business stands out for its breadth, mastery of detail, and its bridging of scientific evidence with actionable tools for making positive real-world impact. The book explains why companies are critical for attaining the SDGs and outlines how they can contribute to these global goals. At Robeco we are dedicated to this ambition: we are a research-driven investment firm that is pioneering SDG investment strategies in fixed income and listed equity. This relevant book confirms and inspires our SDG-investing journey."
Karin van Baardwijk, CEO Robeco
"There is no way to keep climate change from surpassing the critical 1.5 degrees Celsius level without the strong engagement of the private sector. Delivering fully on the Paris Agreement and the SDGs is in fact a pipe dream absent the active collaboration of business. This insightful book provides a valuable guide to strategic investment decisions that align with core international priorities in sustainability that can benefit us all."
President Mohamed Nasheed, Speaker of the Maldives People’s Majlis and founding Chair of the Climate Vulnerable Forum
"The scientific community has argued for a long time that the transformation to sustainable business is necessary for the world to have a chance of delivering the SDGs within a safe operating space on Earth. Rob van Tulder and Eveline van Mil reinforce the urgency of solving the planetary crisis we face, while adding a crucial additional dimension – the new narrative for the future; that sustainable business is not only the path to planetary responsibility, it is also the path to prosperity and equity, i.e., it is not only our common future on Earth that is at stake, it is also a choice between modernity and regress."
Prof. dr. Johan Rockström, Director of the Potsdam Institute for Climate Impact Research and Professor at the Institute of Earth and Environmental Science at Potsdam University
"This book speaks to the new world of work. The sustainable future that we all want and the resilience that must be developed by businesses to make it possible for us to arrive at a better quality of life for all. Excellent insights on three broad sets of principles: systemic, societal and dynamic as well as strategic and operational."
Douglas Opio, Executive Director, Federation of Uganda Employers (FUE)
"Principles of Sustainable Business presents the clear and defining frameworks needed in order to turn our social, ecological and climate problems into business opportunities. Translating the SDG agenda into pro-active business models and cross-sectoral partnership strategies will help business leaders bridge the gap between intention and realization."
Paul Hawken, creator, author, editor of 'Drawdown', 'Natural Capitalism', 'The Ecology of Commerce', and 'Re-Generation. Ending the climate crisis in one generation'
"From its inception in the form of the 'Millennium Declaration' at the change of the millennium, to the status of the SDGs, and in the midst of the Covid pandemic the world is struggling through different and difficult challenges. Rules, techniques, approaches, and past and newly created systems are simply insufficient to address the complexity of the challenge.
This book is a brave attempt to break the conundrum by elevating our mindset to address it from the ‘Principles’ level, providing well thought out ideas at the macro, meso and micro level of analysis and action steps. The SDGs tagline: Global Goals National Targets, and its 232 indicators is just a start to appreciate the complexity across the wide spectrum of developments that the world is living in. With the business and corporate world playing a major role in both the economic development and management knowledge fronts, if we are serious about hitting the goals, this book is a must read to elevate our approaches beyond strategy and policy. After all, strategy may change, Principles remain."
Prof. Kuntoro Mangkusubroto, Head of President of Indonesia’s Delivery Unit (2010–2014), and co-founder of School of Business and Management – Institut Teknologi Bandung (SBM-ITB)
"The 2030 Sustainable Development Agenda, and the 17 SDGs that underpin it, recognize that the natural world and its life-giving services must be urgently protected if we are to fulfil the needs of nine billion people by 2050. The SDGs are premised on the notion that we cannot solve problems in isolation. Protecting these ecosystems will require strong institutions, governance and cooperation from the local to the international level (SDGs 16 and 17). Nature-based Solutions (NbS) are thereby increasingly recognized as a key part of the response to the climate crisis by governments, businesses and communities. It is crucial that these interventions are credible, measurable and inclusive. Principles of Sustainable Business fills the intellectual and practical gap for private organizations willing to work on Nature-based approaches in a profound, fundamental as well as thought-provoking manner. For public organizations and communities, the book provides relevant tools, resources and (cross-sector) partnering techniques to help companies move beyond a reactive to a proactive approach in support of Nature-based Solutions."
Angela Andrade, Chair, IUCN Commission on Ecosystem Management and IUCN’s Global Standard for Nature-based Solutions
"Principles of Sustainable Business is a milestone for all executives, academics and students keen to dwell deeper into the SDGs. The book aptly shows the extreme importance of purpose-driven organizations. We like the solid treatment of the opportunities and threats surrounding the ‘hybridization’ of many organizations that try to combine profits and societal purpose, not as a compromise but as an innovative novel business model that presents a resilient approach to many of today’s sustainability challenges. We are, of course, thrilled to see the SDG Action Manager being mentioned as one of the practical tools that can be used by large and small companies to implement the SDGs."
Marcello Palazzi and Leen Zevenbergen, Co-founders, B Lab Europe
"This book is essential reading for anyone partnering in or with the corporate sector. The authors are clear – collaboration across and beyond the usual boundaries is fundamental to sustainable and transformative development. Partnering is not only enshrined in SDG 17 – Partnerships for the Goals – but forms the basis of the collaborative approach of all SDGs: People, Planet, Prosperity, Peace and Partnering. The question is no longer ‘why?’ but ‘how?’ Those involved in initiating, nurturing and supporting the partnering process have a subtle but vital task to assist partners in navigating what is complicated and penetrating to the heart of what is complex. The concepts so thoroughly articulated here give those in the brokering role the solid ground on which to build their work."
Ros Tennyson, Founder & Strategic Advisor, Partnership Brokers Association
"This innovative, state-of-the-art book approaches the SDGs as both wicked problems and wicked opportunities. Its complexity-based approach will challenge leaders (and future leaders) to think and act in new ways to transform their organizations to negotiate the VUCA world that the authors well document."
Sandra Waddock, Galligan Chair of Strategy, Carroll School Scholar of Corporate Responsibility, Professor of Management, Boston College
"This is a unique and outstanding textbook and a practitioner treasure. It provides a clear understanding of the Sustainable Development Goals and their relevance to business. It offers insightful, distinctive, and constructive guidance on how to achieve more societally impactful sustainability strategies and operations, including essential cross-sector partnering. The book is rigorous and highly readable. Each chapter starts with guiding Principles and ends with crisp takeaways. Supplemental Web-related sources provide additional resources to deepen and broaden the learning. A timely and valuable contribution."
James E. Austin, Eliot I. Snider and Family Professor of Business Administration, Emeritus, Co-Founder Social Enterprise Initiative, Harvard Business School
"FLAME University's core values include ecological balance and an inclusive society, which implies that we often challenge what is known and believed about higher education. For this aim we are collaborating with the Wage Indicator Foundation to learn how students can engage in action research, blended learning and investigative journalism by collecting robust data on Living Wages around the world. Principles of Sustainable Business, not only supports us in this effort, but presents the scientific basis to found our research and teaching in the broader agenda of the Sustainable Development Goals. A must-apply approach for all universities."
Dr. Santosh Kumar Kudtarkar, Dean, Faculty of Liberal Education, FLAME University, India
"The Sustainable Development Goals (SDGs) are 'wicked problems' (systemic, ambiguous, complex and conflictual problems), where politics trumps evidence, and solutions are never first best or permanent. Wicked problems cannot be solved, only managed or resolved over and over again. However, as Van Tulder and Van Mil argue, the SDGs are not only wicked problems but also provide wicked opportunities for firms that want to become sustainable businesses that add value to society. The core question that motivates the book is how can companies become sustainable businesses? The answer provided by the authors is a principles-based road map for corporate action on the SDGs, organized around three levels of analysis: systemic, societal and dynamic, and strategic and operational principles. Drawing on multiple frameworks, examples and illustrations, Principles of Sustainable Development pulls together the newest thinking in academia, consulting, and government policymaking. The book is a 'one stop shop' – that rare book which provides an over-arching, principle-based approach to understanding sustainable business in the 21st century. Everyone – from instructors looking for a textbook for their course on the SDGs to business executives who want to better link their CSR strategies to the SDGs to policy makers hoping to attract foreign multinationals that will foster sustainable development – will find what they are looking for here. Principles of Sustainable Business is a 'must read' for students, corporate executives, and policymakers who want to think intelligently and effectively about the SDGs and how firms can and should develop strategies that are SDG relevant."
Lorraine Eden, Professor Emerita of Management and Research Professor of Law, Texas A&M University, 2020–2023 Dean of Academy of International Business (AIB) Fellows
"In a global economy that can only be guided by principles rather than rules, multinational enterprises face many challenges to compete while at the same time sustaining and gaining a license to operate. It is important that companies subscribe to the Sustainable Development Goals as a set of unifying principles and get the frameworks and tools to ‘walk the talk’. Dealing with the SDGs has not only been a challenge for firms, but also for International Business (IB) scholars around the world: how can we make sure that companies become a ‘force for positive change’. This groundbreaking book by highly acclaimed IB professor Rob van Tulder and his co-author Eveline van Mil provides the intellectual foundation for corporations to base their contributions to the SDGs on intentions and solid academic knowledge to change preferences into realizations. And the teaching material will be very helpful in academia."
Maria Tereza Fleury, President of the Academy of International Business (AIB), Full Professor at Fundação Getulio Vargas (FGV) and the University of São Paulo
"Principles of Sustainable Business is a gift to the world – and not a moment too soon. If we humans are to survive and thrive into the distant future, we must embrace the SDGs and see them realized in practice. But how? Rob van Tulder and Eveline van Mil provide just the kind of cross-level, cross-sector, substantive and process-oriented approach the world needs at this crucial time. They imagine why and how key actors, and especially businesses, might achieve an idea embodied in an English word that dates from the 15th century – commonwealth – which meant common well-being. These authors show us how well-being can become far more common and far more long lasting."
John M. Bryson, McKnight Presidential Professor Emeritus, Hubert H. Humphrey School of Public Affairs, University of Minnesota
"Principles of Sustainable Business is extremely valuable for its advocacy and operationalization of a paradigm shift from maximizing shareholder wealth to generating additional societal value by contributing to the achievement of the SDGs. It surfaces the challenges businesses face in an uncertain and disruptive world and provides concrete cases from the literature and the authors’ intimate knowledge of sustainable business practices on the ground. The authors’ discussion of resilience is a convenient handle for unpredictable situations. At the same time, the chapter on collaboration underscores the importance of carving spaces for cross-sector partnerships as a means to address complex and seemingly insurmountable challenges."
Maria Cynthia Rose Banzon-Bautista, Ph.D., Vice President for Academic Affairs, University of the Philippines