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Preparing Businesses to Face the Sustainability Revolution

The industry is getting the message, pushed by both government and stakeholders, including investors and consumers, who want more sustainable business practices and faster progress. Recent years have seen announcements of aggressive measures to adopt 100% renewable energy (DBS), maintain ethical sourcing practices (Olam), and achieve net-zero emissions (Singtel). These companies are leading the movement, but there is more to be done. 

Nanyang Business School (NBS), part of Nanyang Technological University, Singapore (NTU Singapore), is heeding the call and facilitating more research, thought leadership, and education on sustainable business practices. As a leading business school, NBS is focused on innovation and impact in Asia and beyond.

“Sustainability is a business imperative”

The Director of the Centre for Business Sustainability and Professor of Operations Management and Corporate Sustainability at NBS, Prof S. Viswanathan (Vish), recognises that sustainability has now become a corporate imperative. Regardless of size or sector, every organisation must act sustainably. In fact, investors, consumers, governments, social sector organisations, and society at large demand it. Recognising this, sustainability is part of the core curriculum in all the MBA programmes at NBS so that graduates are equipped with the skills to take the lead on urgent social issues like climate change in their respective industries.

Business Case for Sustainability

According to Prof Vish, in the past, companies had always taken socially responsible actions when it was in their interests. However, many companies are guilty of ignoring the climate change challenge as it is a long-term, global issue that does not necessarily support short-term profitability. This attitude is changing now with growing pressure from stakeholders, NGOs, and activist investors, and by youth groups such as the one led by Ms Greta Thunberg.

He continues, “The failure of companies to acknowledge their contributions to the problem or their responsibility to address it is no longer an option.”

“Corporate Social Responsibility (CSR) as practised earlier by companies was in many cases completely tangential and marginal to their core operations, hence CSR received a bad rap, and many considered the phrase synonymous with greenwashing,” he adds.

Companies, therefore, need to incorporate sustainability into their core strategy; and examine and mitigate every negative externality created by their activities to the environment, society, and the rapid exhaustion of our natural resources.

Given that the challenge of sustainability is a broad set of ‘interlocking crises,’ with multi-faceted solutions and slow evidence of progress, there is no clear roadmap. Prof Vish explains that every organisation must practise sustainability in its own context.

However, these actions are abstract, broad in scope, and lack specific, actionable guidance. So how can companies best position themselves to tackle this sustainability challenge?

The Sustainable Impact Reference Framework (SIRF), developed by Prof Vish and included in the module in the MBA programmes at NBS, allows companies to adopt a more sustainable business model. By applying SIRF, companies can embed sustainable practices in everyday decision-making.

The Sustainable Impact Reference Framework

This framework encourages a holistic, long-term perspective while also grounding short and medium-term company decision-making to build sustainability in eight key areas:

SIRF can identify and prioritise high-impact projects that mitigate environmental and societal costs.

SIRF in Action

Introduced by Prof Vish in his Corporate Sustainability module and practised in class discussions and through student projects, the SIRF framework analyses sustainability performance and how corporations can adapt existing practices to be more sustainable. He outlines several ways the SIRF model can help businesses.

1. Start with the correct measurement

Companies should be expansive when measuring the scope of their impact, as broader scope means more opportunities to build sustainable practices. Take, for instance, greenhouse gas emissions. A company’s emissions include direct emissions generated by fuel combustion at manufacturing facilities and company-owned vehicles (referred to as Scope 1 emissions). However, this disregards indirect emissions from the electricity used (Scope 2 emissions) in addition to the energy used to produce purchased inputs, emissions incurred by its supply chain and resources used for waste disposal, or employee business travel (Scope 3 emissions).

Sustainable business practices require a comprehensive understanding of your company’s environmental and societal impact before tackling the problem. Measuring a company’s impact also provides a way to measure and compare the efficacy of investments in sustainability. For example, how much was the electricity usage or by how much was the carbon emissions reduced?

2. Adopt sustainability at the product design stage

If the product’s design is unsustainable, then mitigating negative externalities during the manufacture and use of the product becomes a huge challenge. Suppose product design creates significant pollution at the factory during manufacturing. In such a case, any amount of focus on Environment, Safety and Health (ESH) at the factory will not address the issue of worker health and safety. Prof Vish illustrates this using Nike’s “considered design index” case, when the company radically altered the shoe design to be more sustainable.

3. Building circular economy thinking and remanufacturing strategies for several product life cycles

Companies need to employ life cycle analysis and consider product or service design from multiple perspectives. When adopting sustainability, companies focus heavily on inputs. But what happens to your product after its useful life? Manufacturers need to be thoughtful about how the product can be responsibly disposed of, reused, or remanufactured for the following product cycle.

Thinking of product and service design in the context of circular economy encourages design for disassembly, where products can be taken apart quickly with standard tools and reused or recycled. When a product reaches the end of its functional life, the working parts should be reusable or adaptable to other uses rather than eliminating an entire unit due to one broken piece. A good case study here is the example of Herman Miller’s office chair, Mirra. At the end of Mirra’s life cycle, the raw materials used in manufacturing the chair can be channelled into the biological cycle and used for other products.

4. Invest in research

The challenges of today will be the low-hanging fruit of tomorrow. Technological advances have created or enhanced many of the products and services in use today. Committed companies must invest in research that advances sustainable practices in their own companies or industries. A research-driven perspective positions companies to pivot quickly to capture new opportunities.

The leaders of tomorrow must set the stage for sustainable corporate actions and responsible business operations. By educating future business leaders and collaborating with industry and government, NBS prepares companies for the sustainability revolution.

Dr. S. Viswanathan (Vish) is the Director of the Centre for Business Sustainability and Professor of Operations Management and Corporate Sustainability at Nanyang Business School, Nanyang Technological University, Singapore, where he has been a faculty member since 1992. He is also a Cluster Director at Energy Research Institute @ NTU (ERI@N). Vish’s teaching interests are in corporate sustainability, operations management, sustainable operations, inventory theory, supply chain and logistics management, and optimisation. His research interests include sustainable operations, supply chain management, business models for sustainability, life cycle analysis, inventory management, and policies for decarbonisation.

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