1. Embedding Environmental
Sustainability within Corporate
Strategy; Concept and
Implementation
Proposal for Honour’s Dissertation Project
Supervisor: Dr Hock Tan
Matriculation: 40059632

2. Table of Contents
Background to Study..................................................................................................................3
Aim.............................................................................................................................................4
Objectives...................................................................................................................................4
Objective 1.............................................................................................................................4
Objective 2.............................................................................................................................4
Objective 3.............................................................................................................................4
Objective 4.............................................................................................................................5
Initial Review of Literature........................................................................................................5
Introduction...........................................................................................................................5
History of Concepts and Theory’s.........................................................................................5
The Interrelated Economical Perspectives............................................................................6
Development of Embedded Sustainability............................................................................6
Why Embed Sustainability?..................................................................................................7
Models and Theory's on How to Embed Sustainability........................................................7
Energy Industry.....................................................................................................................8
Conclusion.............................................................................................................................9
Research Methods: Description and Justification......................................................................9
Hypothesis and Questions.....................................................................................................9
Secondary Research.............................................................................................................10
Primary Research: Cross Sectional Case Study..................................................................10
Intended Purpose of Case Study ....................................................................................10
Collection of Information...............................................................................................10
Analysis of Information..................................................................................................11
Arrangement of Results..................................................................................................11
Time-line..................................................................................................................................12
References...........................................................................................................................12
References................................................................................................................................13
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3. Background to Study
Corporate philosophy on environmental sustainability has evolved and changed though the
years. Strategists such as Friedman (1970) believed the only social responsibility of
business was to make profit. Freeman and Reed (1983) then encouraged businesses to
consider the stakeholder. In 1990 The Triple Bottom Line becausebecame popular
encouraging people, profit and planet business motives. Current ideas neglect the notion of
trade-offs between profit, social value and environmental value, encouraging businesses to
embrace all factors to create sustainable value. This is achievable through embedding
sustainability into corporate strategy.
Corporate embedding of sustainability it is a significant and viable solution which would
contribute towards tackling environmental, social and economical issues. There are many
pressures driving businesses to embed sustainability however there is a lack of consensus
over the techniques of implementation. This can be perceived as a barrier. Therefore there is
a requirement to build upon research in this area.
Although economic, and social and environmental sustainability are interrelated, the
necessity to maintain the planets resource base is essential. Therefore the project will focus
upon environmental sustainability. The energy industry is the main current and future actor in
the creation of environmental suitability, hence the intended purpose of the research will be
to advise mangers in the energy industry on how to embed environmental sustainability into
strategy.
The opportunity for companies within the energy industry to embed sustainability has
relevance to the authors previous study of change management. Conventional companies
within the energy industry are currently experiencing miss-alignment with their external
environment due to the depletion of the resource base. Currently the issue is not adequately
addressed by the energy industry and radical change of strategy towards renewables is now
required. The project's investigation into an appropriate strategy for embedding
sustainability, via primary research of the The Little Green Company and secondary
research into models of embedded sustainability, is intended to provide contribution towards
strategy to address miss-alignment within the energy industry.
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4. The Little Green Energy Company are experts in designing and installing photovoltaic solar
panels within South East England. Theis successful Small to Medium Enterprise (SME) also
installs solar thermal, air source heat pumps and LED lighting products. They supply to a
mixed market of consumers, commercial buildings and new builds and pride themselves on;
their non-standardised approach towards the customer, the product portfolios strong value
for money and offering high quality goods.
Aim
To undertake primary research within The Little Green Energy Company to assist with the
investigation of the concept of embedding environmental sustainability and to discover
practical strategies for implementing embedded sustainability, particularly within the energy
industry.
Objectives
Objective 1
To describe the concept of embedding environmental sustainably by reviewing and
comparing relevant and useful literature and theory.
Objective 2
To investigate and identify key models and theoriey’s on how to embed environmental
sustainability into corporate strategy.
Objective 3
To undertake primary research within ‘The Little Green Energy Company’ (solar panel
designer and installer) to assist in answering the question; how can environmental
sustainability be embedded into strategy?
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5. Objective 4
To make recommendations, based on the analysis of both primary and secondary
information, to managers, particularly in the energy industry, who are seeking to take
advantage of the opportunity to embed environmental sustainable development into strategy
and move beyond corporate requirements.
Initial Review of Literature
Introduction
This section will provide a review of literature in the topic area; embedding environmental
sustainability. The body of the review will discuss modern literature, drawing on key theories
and models however the review will also provide a historic account of literature in the
general area of sustainability. The historic account will display the development of
sustainable development theory and concepts.
History of Concepts and Theory’s
The term ‘sustainable development’ originated from the Brundtland Commission’s report on
the global environment and development. The Brundtland Report (1987) defines sustainable
development as:
“Development that meets the needs of the present without compromising the ability of future
generations to meet their own needs.’’
After the publication of the Bruntland Report, Elkington (1997) introduced a measuring
system for sustainable development in the interlinked areas of profit, people and planet.
Elkington's “Triple Bottom Line” encouraged businesses to take account of the full cost
involved in doing business. Although the tTriple bBottom Lline has raised awareness of the
positive and negative externalities of businesses, it receives heavy criticism. Sridhar and
Jones (2013) disagree with its quantitative economic paradigm and believe it has an
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6. understated outlook on what corporate sustainability should aim to be. The criticism
reinforces the dissertations focus on the environmental pursuit of businesses.
It should be noted that sustainability has a separate definition to sustainable development.
Sustainability is the meeting of the sustainable development goal (above definition). For
example an environmentally sustainable system maintains a stable resource base for the
present and avoids the over exploitation of renewable resource systems for the future
generations (Harries, 2003).
The Interrelated Economical Perspectives
Steger (2004) recognises the need for companies to generate positive externalities. His
industry specific perspective is drawn from an unusual research collaboration of the IMD
Business School and the World Wildlife Federation (WWF) commission.
Steger argues companies should move beyond compliance to make the environment a
business principle. This is a positive movement from the 1980's where businesses focused
on cheap, fast and better operations and dismisses ideas from 'The Corporation'
documentary which labelled big businesses as self-interested psychopaths (The Economist,
2004). However several of his concepts appear to be outdated and controversial. For
example Steger's (p8) 'smart zone' concept diagram illustrates that a heavy corporate focus
on social-environmental aspects restrict a companies economical value and profits.
Development of Embedded Sustainability
Laszlo (2005, p.3) contributes to the changing paradigm of sustainability, proposing
corporations are no longer perceiving environmental stewardship as a cost, as seen in
Steger's model, but an opportunity. Laszlo and Zhexembayeva (2011) explore beyond
environmental stewardship, suggesting profit can now be generated by embedding
sustainability into a companies core. The book sees 'embedded sustainability' as a necessity
for long term growth and believes businesses need to conciser the security of the value
chain as of equal importance to the 3 C's of business (customers, capital and competition).
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7. Why Embed Sustainability?
Laszlo and Zhexembayeva provide a persuasive account of why businesses should embed
sustainability. They believe the first motivating force is an increase in transparency due to
public annual report requirements and social media. Another drive is the increasing
expectations from consumers for high quality, readily available, sustainable products which
are a reasonable price. Finally employee and investor expectations of corporate
sustainability are rising. Company strategy needs to be consistent with the expectations to
engage and retain staff and investors. Laszlo and Zhexembayeva believe the creation of
value and competitive advantage is at the centre of these forces, that trade-offs between
stakeholder value and shareholder value need not occur and that companies should instead
aim to create sustainable value.
Therefore, in attempt to advise strategic decision making of businesses towards creating
sustainable value (Objective 4), the author will seek to answer the question How does a
business strategically respond to the three key market pressures? (Objective 2-3).
Models and Theory's on How to Embed Sustainability
Hart (2007) believes corporations are the only organizations with the resources, technology,
motivation and global reach to achieve sustainability. He believes companies need to move
beyond 'greening' towards sustainability and now need to take a top down approach to
exploit environmental opportunities. Hart introduces 'The Sustainability Portfolio' as a tool to
show a company’s consistency with sustainability. The sustainability portfolio requests
companies to rate and question their use of; clean technology, a sustainable vision, pollution
prevention and product stewardship. Hart believes a company should have institutionalized
each of the factors and that each factor should weigh equally.
Epstein and Roy (2003) also contributes towards corporate strategies to target
environmental issues. They believe, to integrate sustainability principles into business
strategy, managers must quantify the link between social and environmental actions and
financial performance. Epstein and Roy provide guidance on how to integrate financially
sensible social and environmental initiatives into companies decision-making processes and
operations. Epstein and Roy believe, in order to make informed decisions on the correct
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8. trade-offs, companies should implement systems to evaluate the potential impacts of
sustainability initiatives on financial performance and to discover potential barriers. They
believe effective evaluation will assist with choosing sustainability projects with the greatest
net value to sustainability and financial performance.
Nevertheless models which pay more regard to the external environment will be utilized in
this project. Porter's (1985) 'Three Generic Strategies' can discover the conditions under
which sustainability can lead to competitive advantage. Kim and Maubourgne's (2004) 'Blue
Ocean Strategy' shows how corporate use of strategic value innovation creates markets
which were previously non-existent and are supportive of sustainability. Christensen's (1997)
'Disruptive Innovation' leads businesses to commit to transformational change to overcome
imbalances in nature such as climate change as he believes incremental change is not
sufficient.
Energy Industry
Steger (2004) provides an industry review of the energy industry which is of high relevancy
to this honours project. He highlights the need for companies within the energy sector to
radically change their business models, focusing on renewable energy's in order to combat
resource depletion and climate change.
Eckhart (2006) describes the positive movement of the energy industry towards renewables,
from 2005-2006 from the introduction of the Renewable Fuels Standard within the Energy
Policy Act. He observes the increasing price of conventional fuel and the reducing cost of
renewable fuels in the US. This indicates Steger's desired movement is under-way. Further-
more Chinas Business News Weekly (2009) stated that about 19% of global energy
consumption originated from renewable sources and that the technical potential for use of
renewables exceeds all other potential resources.
The growth trends of renewable energy’s, specifiably wind and solar, are illustrated in Global
Data's (2013) analysis of the renewable energy industry. Global Data record a 100 Giga Watt
(GW) increase from 2011 to 2012 and predict the output from renewable energy will continue
to rise. However another key trend predicted is a slow down in European renewable energy
markets due to cuts in feed-in-tariffs for solar projects. The global reports analysis of the
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9. external environmental influences in the renewable energy sector will help to predict the
consequences of embedding sustainability in the energy sector. This will help to provide a
balanced argument when making recommendations (Objective 4).
Conclusion
To conclude, the literature review highlights the essential present and future role private
corporations play in achieving environmental sustainability. In the past this role may have
been considered as a profit draining responsibility however corporations are now beginning
to see environmental issues as an opportunity. The new paradigm which promotes
environmental strategies and embedded sustainability is convincing and driven by many
factors. There is, however, high controversy over the strategies a business should
implement to effectively embed sustainability. This being said the growth of renewables
demonstrates businesses in the energy industry are successfully managing to embed
environmentally sustainability into their strategies. Therefore, an investigation into a
renewable energy company’s strategy should provide industry specific findings which reveal
truths over practical strategic choices and models to select to embed sustainability.
Research Methods: Description and Justification
Hypothesis and Questions
The primary and secondary research of the project will attempt to prove and address;
1. Hypothesis: A case study investigation into a renewable energy company’s strategy
will reveal truths on how to embed sustainability.
2. Hypothesis: The findings from the primary research (case study) are consistent with
models of embedding sustainability.
3. Question: What are the best techniques/ models for embedding environmental
sustainability into strategy?
4. Question: How could these models be applied to conventional energy companies to
promote the movement to renewable fuels?
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10. Secondary Research
The secondary research will firstly discover key approaches of embedding sustainability into
strategy. The research will then identify supporting and opposing perspectives of the key
models in order to examine the reliability, generalizability and validity of the models to the
research objectives. The source and currency of the models will also be investigated. The
models will be in the general area of sustainability as environmental, social and economic
factors are interrelated however models which do not incorporate environmental
sustainability will be excluded as they would lack relevancy to the project’s environmental
focus.
Primary Research: Cross Sectional Case Study
Intended Purpose of Case Study
The case study investigation of The Little Green Energy Company's sustainability strategy
will attempt to reveal the most relevant and feasible models for embedding environmental
sustainability particularly within the energy industry context.
Collection of Information
Access for a case study instigation has been gained via a phone call to a senior engineer
within The Little Green Company. A questionnaire research approach has been selected by
the author. The majority of the questions will be open-ended in attempt to gain qualitative
information. The key areas of investigation will be the company’s decision making process
for choosing a sustainable strategy, its selection of sustainability strategy and the
implementation.
A purposive sampling method will be utilized in order to address the above questions and
hypothesis. This method selects informants based on the knowledge they posses (Bernard,
2002). Case studies are useful in accessing a group of knowledgeable informants. The case
study will question all staff to ensure higher precision. Managers within the company are
more likely to provide informed answers on The Little Green Companyie's sustainability
strategy however subordinates should also be able to contribute over how they feel the
company chooses and implements its sustainability strategies.
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11. The questionnaire will firstly explain purpose of investigation and then ask clear,
unambiguous and simple questions which do not lead the informant. The questions will be in
a logical order investigating the strategic decision making process though to strategy
implementation. The questionnaires will be given directly to the staff mid-December.
Analysis of Information
A directive content analysis will be utilized to analyse the qualitative information collected.
The key variables identified from the main models of embedding sustainability and
established links between the variables will determine the coding scheme for the primary
data. The text that cannot be categorized will be given a new code. Directive content
analysis has been selected in order to show the supporting and non-supporting models of
the case study findings. The study should reveal descriptive evidence of the main
properties/variables of embedding sustainability and their interrelatedness. A directive
content analysis of the case study using all the key variables from the main models of
embedding sustainability established from secondary research should identify the strongest
models of embedding sustainability for the energy industry.
Arrangement of Results
Each of the key models and variables identified from secondary research will be listed and
the supporting or opposing evidence and from the case study will be described. The
strongest correlations will help to conclude over how to embed environmental sustainability
into strategy within the energy industry.
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12. Time-line
References
12
Activity
Semester 1 2014 Semester 2 2015
Date
21/11/14
24/11/14
02/12/14
09/12/14
15/12/14
22/12/14
29/12/14
05/01/15
12/01/15
19/01/15
26/01/15
02/02/15
09/02/15
16/02/15
23/02/15
02/03/15
09/03/15
16/03/15
23/03/15
02/04/15
09/04/15
Week
11
12
13
14/Exams
15/Exams
Christmas
Christmas
Christmas
1
2
3
4
5
6
7
8
9
10
11
12
Writing of Literature Review
Generation of Questionnaire
Questionnaires Collected
Research Methods Write up
Data Analysis Write up
Write up of Conclusions
Write up of Recommendations
Write up of Limitations
Write up of Abstract and Introduction
Write up of Acknowledgements
Binding
Submit Dissertation
Exams
Christmas Holiday
Submitting Proposal and Research
Integrity Form
Background Research for Literature
Review
Questionnaire given to Little Green
Energy Company Staff
Planning of Directive Content
Analysis; format and display
Establish Coding Scheme and Key
Variables and their
Interconnectedness based on primary
and secondary research analysis
Findings from Directive Content
Analysis
Proof Read, Check and Final
Adjustments

13. References
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China Business Newsweekly (2009) “Research and Markets; Take Time To Analyze New
Report on the European Renewable Energy Industry” NewsRX, United States
Christensen, C., (1997) “The Innovators Dilemma” Collins Business Essentials, New York
Cooke, D.J. and Philip, L. (2001) To treat or not to treat? An empirical perspective. In: Hollin,
C.R. ed. Handbook of offender assessment and treatment. Wiley Publishers, Chichester, pp.
3-15
Eckhart, M. (2006) “Renewable Energy Industry: 2005 Review/ 2006 Outlook.” PennWell
Corporation ,United States, Barrington, vol.110, no.1
Elkington J. (1997). Cannibals with Forks: The triple bottom line of 21st Century Business,
Oxford: Capstone Publishing
Epstein, J. M. and Roy, M. (2003) Case for Sustainability: Linking Social and Environmental,
Actions to Financial Performance. In: Anupama, M. Journal of Corporate Citizenship,
Greenleaf Publishing,Vol.11, No.9, pp. 81-96
Freeman, R. E and Reed, D.L ., (1983) “Stockholders and Stakeholders: A New Perspective
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Friedman, M., (1970) “The Social Responsibility of Business is to Increase its Profits,” New
York Times
Global Data Ltd (2013) “Renewable Energy Industry in 2013: Expected Trends and Analysis:
GlobalData Event Analysis” Global Data Ltd, London
Harries, J. (2003) 'Sustainability and Sustainable Development' International Society for
Ecological Economics: USA
Hart, S, L. (2007) “ Beyond Greening: Strategies for a Sustainable World.” Harvard Business
Review
13

14. Kim, C and Mauborgne, R,. (2004) “Blue Ocean Strategy”. Harvard Business Review vol.81,
no.2
Laszlo C,. (2005) The Sustainable Company How to Create Lasting Value Through Social
and Environmental Performance, Island Press, Washington DC
Laszlo C., and Zhexembayeva, N. (2011) Embedding Sustainability The Next Big
Competitive Advantage, Greenleaf Publishing, California
Porter, Michael E. (1985) "Competitive Advantage". , Ch. 1,. The Free Press. New York. pp
11-15
Sridhar, K and Jones, G. (2013) “The three fundamental criticisms of the Triple Bottom Line
approach: An empirical study to link sustainability reports in companies based in the Asia-
Pacific region and TBL shortcomings.”, Springer Science and Business Media, vol.2, no.1
Steger. U,. (2004) The Business of Sustainability Building Industry Cases for Corporate
Sustainability. Palgrave Macmillan, Hampshire.
The Economist (2004) “The lunatic you work for: If the corporation were a person, would that
person be a psychopath?” Available at: http://www.economist.com/node/2647328 Accessed:
02 November 2014.
World Commission on Environment and Development, 1987. Our Common Future. Oxford:
Oxford University Press
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