Finding from the 2014 sustainability & innovation global executive study and research project.

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RESEARCH
REPORT
JANUARY 2015
Joining Forces
Collaboration and Leadership
for Sustainability
The growing importance of corporate
collaboration and boards of directors to
sustainable business
By MIT Sloan Management Review, The Boston Consulting
Group and the United Nations Global Compact
FINDINGS FROM THE 2014 SUSTAINABILITY & INNOVATION
GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECT
R E P R I N T N U MB E R 5 6 3 8 0
In collaboration with
R E S E A R C H R E P O R T J O I NI NG F O R C E S
Copyright © MIT, 2015. All rights reserved.
Get more on sustainability from MIT Sloan Management Review:
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AUTHORS
DAVID KIRON is the executive editor of MIT Sloan
Management Review’s Big Ideas Initiative. He can be
reached at dkiron@mit.edu.
NINA KRUSCHWITZ is MIT Sloan Management
Review’s managing editor and special projects
manager. She can be contacted at ninakru@mit.edu.
KNUT HAANAES is a senior partner and managing
director in the Boston Consulting Group’s Geneva
office, as well as global leader of BCG’s Strategy Practice
Area. He can be contacted at haanaes.knut@bcg.com.
MARTIN REEVES is a senior partner and managing
director in the Boston Consulting Group’s New
York office and head of the Bruce Henderson
Institute worldwide. He can be contacted at
reeves.martin@bcg.com
SONJA-KATRIN FUISZ-KEHRBACH is a knowledge
expert for sustainability at the Boston Consulting
Group’s Hamburg office and core member of
BCG’s sustainability team. She can be contacted at
fuisz-kehrbach.sonja-katrin@bcg.com
GEORG KELL is the executive director of the United
Nations Global Compact. He can be contacted at
kell@unglobalcompact.org.
CONTRIBUTORS
LAURA BRÄMSWIG, associate, BCG
SEAN CRUSE, senior manager, research and communications, UN Global Compact
CARRIE HALL, head of communications & information, UN Global Compact
OLIVIER JAEGGI, managing partner, ECOFACT
RACHAEL POST, writer
HOLGER RUBEL, senior partner and global sustainability lead, BCG
EDWARD RUEHLE, writer
INGVILD SOERENSEN, manager, Global Compact LEAD, UN Global Compact
PHILIP SPECHT, consultant, BCG
GREGORY UNRUH, professor, George Mason University
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 1
CONTENTS
RESEARCH
REPORT
JANUARY 2015
3 / Introduction
4 / Companies Aren’t Going It
Alone
• Sidebar: About The Research
• 2014 Key Findings
• Sustainability’s March to the
Center of Business
7 / The Strategic Relevance of
Sustainability Collaborations
• Strategic Impetus to Collaborate
• Collaboration in Action
• The Spectrum of Partnerships
11 / Keys To Success
• Internal Collaborations
• Shared Language
• Due Diligence
• The Right Entrance and Exit
Strategy
• People Matter
• Board Engagement
14 / Getting The Board On
Board
• Lack of Board Engagement
• Barriers to Board Engagement
• Sidebar: Board Committees’
Responsibilities
• Overcoming the Barriers
17 / Conclusion: The Path to
Success Is Travelled With
Others
20 / Appendix
• Success Factors For Collaboration
• The Survey: Questions and
Responses
30 / Acknowledgments
Sustainability has got to be something that we all care
about. We need groups to collaborate that never have
… everybody’s got to work together. We need to begin
to manage this planet as if our life depended on it —
because fundamentally, it does.
— JASON CLAY, SENIOR VICE PRESIDENT, WWF
Sustainability is the primary moral and economic im-
perative of the 21st century. It is one of the most
important sources of both opportunities and risks for
businesses. Nature, society and business are intercon-
nected in complex ways that should be understood by
decision makers. Most importantly, current incre-
mental changes towards sustainability are not
sufficient — we need a fundamental shift in the way
companies and directors act and organise themselves.
— MERVYN KING, CHAIRMAN OF THE INTERNATIONAL INTEGRATED
REPORTING COUNCIL
THE KING CODE OF GOVERNANCE
1
R E S E A R C H R E P O R T J O I NI NG F O R C E S
Joining Forces
Collaboration and Leadership
for Sustainability
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 3
Introduction
T
he importance of sustainability as a business issue has steadily grown over the
past two decades. Most businesses understand that their sustained success de-
pends upon the economic, social and ecological contexts in which they operate.
But the stability of those contexts can no longer be taken for granted. The physi-
cal environment is becoming more unpredictable, a more interconnected global
economy is altering social conditions, and technological innovation is trans-
forming the nature of consumption and production.
Corporate sustainability has evolved from expressing good intentions and looking for internal
operational efficiencies to addressing critical business issues involving a complex network of stra-
tegic relationships and activities. As sustainability issues have become more global and pivotal to
success, companies are realizing that they can’t go it alone. Through their strategic networks, busi-
ness can, and arguably must, tackle some of the toughest sustainability issues, such as access to
stressed or nonrenewable resources, avoiding human rights violations in value chains
2
or moder-
ating climate change.
Given the implications of sustainability’s evolution within the corporate sector, we — MIT Sloan
Management Review (MIT SMR) and The Boston Consulting Group (BCG) — focused this year’s
research on the critical role of sustainability collaborations that address systemic issues, and on the
role of the board of directors in guiding their companies’ sustainability efforts. To better under-
stand these two topics, we surveyed nearly 3,800 managers and interviewed sustainability leaders
from around the world (see About the Research, page 4).
In addition, this year we joined forces with the United Nations Global Compact, a long-time leader
on sustainability issues — and, more recently, on company boards of directors
3
— in conducting
this research.
4 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
R E S E A R C H R E P O R T J O I NI NG F O R C E S
organizations we can engage to help us create and
deliver the optimal solution based on local needs.”
Intel is by no means alone in its collaborative prob-
lem-solving strategy. Businesses across the globe are
partnering to surmount sustainability challenges
that can impact a company’s viability and success.
Nutrition is a prime example. One in nine of the
world’s inhabitants don’t have enough food to live a
healthy life.
4
A less well-known statistic: one in three
of the world’s population has a diet that lacks the vi-
tamins and minerals essential to well-being. In
developing nations, which can offer new avenues for
corporate activity and growth, malnutrition drives a
vicious cycle of poor health that leads to low produc-
tivity, which in turn drives down overall income and
Companies
Aren’t Going
It Alone
The network of interdependencies among compa-
nies, governments and the public has created a
world of mutual reliance, in which collaboration is
a necessary route to progress. Companies need to
reach out to others if they want to address sustain-
ability challenges, help shape the social context in
which they operate and even explore vital new
market opportunities.
Take the issue of education, for example. Most com-
panies realize that poor-quality education can’t
merely be an issue for social reformers to talk about
— it has profound business implications. Poorly edu-
cated populations are a barrier to success for
companies, which depend on a literate populace as a
source of both an employable workforce and custom-
ers able and willing to buy products and services.
Global technology company Intel has long champi-
oned the social value of education, collaborating
with other organizations to bolster access to quality
education. Since 2001, it has invested nearly $500
million dollars in literacy and education projects
around the world. But Intel understands that it can’t
go it alone or simply expect public institutions to do
the work. Intel partners with teacher groups to pro-
vide training and conduct research on the most
effective education methods. It also teams up with
for-profit entities that depend on educated popula-
tions, such as publishers and broadband providers in
underserved regions.
When it comes to any large societal problem, be it
education, climate change or human rights, the goal
is to create potent, comprehensive solutions. “We
look at things holistically, including the ultimate
outcome,” says Intel’s director of Global Education
Sales Programs Brian Gonzalez. “From there, we de-
termine which industry, government and academic
ABOUT THE RESEARCH
For the sixth consecutive year, MIT Sloan Management Re-
view, in partnership with The Boston Consulting Group (BCG),
conducted a global survey. This was the first year that the
United Nations Global Compact joined the partnership.
The 2014 survey response set included more than 3,795 ex-
ecutive and manager respondents from 113 countries. This
report is based on a smaller subsample of 2,587 respondents
from commercial enterprises. To focus on business, we ex-
cluded responses from academic, governmental and
nonprofit organizations. Respondent organizations are located
around the world and represent a wide variety of industries.
The sample was drawn from a number of sources, including
BCG and MIT alumni, MIT Sloan Management Review sub-
scribers, BCG clients, UN Global Compact participants and
other interested parties.
In addition to these survey results, we interviewed practitio-
ners and experts from a number of industries and disciplines
to understand the sustainability issues facing organizations
today. Their insights contributed to a richer understanding of
the data and provided examples and case studies to illustrate
our findings.
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 5
increases food insecurity. The cycle can crush up to
2% of a country’s GNP.
5
“Adding essential nutrients to food is not some-
thing governments can do, because they don’t
produce food,” said Andreas Bluethner, director of
food fortification and partnerships at the German
chemical company BASF. “The private sector can’t
do it alone, because public health is not their core
purpose. NGOs can’t do it because they do not have
all the necessary technical expertise. Making nutri-
tion affordable for poorer population groups
requires partnerships between all sectors on a
global scale.”
To tackle global nutrition challenges, BASF became
a founding member of SAFO, the Strategic Alliance
for the Fortification of Oil and other staple foods.
BASF works with NGOs such as the Global Alliance
for Improved Nutrition (GAIN), along with federal
and local governments, to add important nutrients,
such as vitamin A, to basic foods.
2014 KEY FINDINGS
The efforts of Intel and BASF are emblematic of the
findings from the sixth annual global executive sus-
tainability survey conducted by MIT SMR, BCG and
the United Nations Global Compact. Specifically:
Corporate sustainability is moving steadily from the
old model — comprised primarily of ad hoc or op-
portunistic efforts that often produced tense
relationships with the public sector — towards strate-
gic and transformational initiatives that engage
multiple entities. The goals of these collaborations
are many and include corporate benefits such as in-
fluencing standard-setting authorities, garnering
access to resources and developing new markets.
Our research found that as sustainability issues be-
come increasingly complex, global in nature and
pivotal to success, companies are realizing that they
can’t make the necessary impact acting alone. The
sentiment is nearly unanimous among managers:
90% of respondents agree that businesses need to
collaborate to address the sustainability challenges
they face (see Figure 1).
The belief is echoed by a growing chorus of aca-
demic and nonprofit leaders and has spawned
considerable research from organizations such as
the Network for Business Sustainability and the
Forum for the Future in conjunction with the busi-
ness community. These organizations, and others,
offer several suggestions about how to create effec-
tive sustainability collaborations. We highlight
several of these success factors in the table Success
Factors for Collaboration on p. 20.
Despite nearly unanimous consensus on the impor-
tance of sustainability collaborations, practice lags
behind belief: Only 47% of businesses are engaging
in sustainability-related partnerships. A majority
(61%) of those assesses their collaborations as “quite”
or “very” successful. Taken together, however, these
responses indicate that less than 30% of all surveyed
managers say their companies are engaged in suc-
cessful sustainability partnerships.
Effectively addressing
sustainability issues can
not be done alone but
requires collaboration.
How successful are the
sustainability
collaborations your
organization is engaged in?
Is your organization engaged
in sustainability-related
collaborations?
90% agree that
collaborations
are needed for
sustainability
Of these, 61%
assess their
sustainability
collaborations
as successful
47% state that
their companies
collaborate on
sustainability
67% 23% 5% 3% 1% 1%
Agree
strongly
Agree
somewhat
Neither
agree nor
disagree
Disagree
somewhat
Disagree
strongly
Don’t
know
Don’t know
No
Yes
47%
34%
19%
18% 43% 27% 8% 0 4%
Very Quite Somewhat Slightly Not at all Don’t
know
FIGURE 1: CORPORATE VIEWS ON
SUSTAINABILITY COLLABORATIONS
Though most respondents believe collaborations are needed for sustainability, only
47% say their companies are engaged in sustainability-related collaborations.
6 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
R E S E A R C H R E P O R T J O I NI NG F O R C E S
The same gap rears its head on board engagement
with sustainability matters: 86% of respondents be-
lieve that their boards of directors should play a
strong role in driving their company’s sustainability
efforts, but only 42% of boards are perceived to be at
least moderately engaged with the company’s sus-
tainability agenda (see Figure 2). The gap can
significantly hamper success. Organizations where
the board is actively engaged in sustainability collab-
orations are twice as likely to report success with
those efforts.
The time is right to deepen board engagement on
sustainability issues. How organizations might ac-
complish this is a topic in this report.
SUSTAINABILITY’S MARCH TO
THE CENTER OF BUSINESS
Overall, our survey found that sustainability is
continuing its march to the center of business.
For example:
• Thirty-nine percent of respondents
say their companies publicly report
their sustainability efforts, a 15% in-
crease over the past four years (see
Figure 3).
• The number of companies that have
both key performance indicators
(KPIs) and clear governance structures
toward sustainability has increased by
6% over the same four-year period.
• The number of companies that have
sustainability as a top management
agenda item jumped from 46% in 2010
to 65% in 2014.
• The number of companies without a
sustainability business case and value
proposition is also declining: between
2009 and 2014, the percentage of
companies that have not created a
sustainability business case dropped
from 42% to 23%.
The board of directors should play
a strong role in my organization’s
sustainability efforts.
To what extent is the board of
directors engaged in your
organization’s sustainability efforts?
65% 21% 7% 3% 1% 2%
Agree
strongly
Agree
somewhat
Neither
agree nor
disagree
Disagree
somewhat
Disagree
strongly
Don’t
know
22% 20% 15% 14% 13% 15%
To some
extent
To small
extent
To
moderate
extent
To great
extent
Not at all Don’t
know
86% agree
that boards
should play a
strong role in
sustainability
42% report
that their
boards are
substantially
engaged in
sustainability
FIGURE 2: HOW ENGAGED ARE BOARDS OF DIREC-
TORS IN SUSTAINABILITY?
A majority of respondents believe their board of directors should play a strong role in
their company’s sustainability efforts.
Regarding sustainability
in your organization,
does your organization
have: (Please choose
all that apply)
40% 50% 60% 30% 20% 10% 0%
Chief Sustainability Officer
Link sustainability performance
with financial incentives
Responsible person
per business unit
Separate function
for sustainability
Personal KPIs
related to sustainability
Operational KPIs
related to sustainability
Sustainability reporting
Clear responsibility
for sustainability
Strong CEO commitment
to sustainability
4-year
trend
-9%
+6%
+15%
+6%
+5%
+1%
+2%
-2%
-1%
2011
2012
2013
2014
FIGURE 3: SUSTAINABILITY IS BECOMING MORE
INTEGRATED INTO COMPANIES
Companies are continuing to integrate sustainability activities into their business.
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 7
These changes are consistent with sustainability-
related collaborations becoming more strategic
and transformational in nature — 74% of col-
laborations address a strategic challenge, and
54% aim at transforming the market in which
the business operates (see Figure 4).
6
Moreover,
companies that include sustainability as a top
management agenda item are more than twice
as likely to pursue collaborations that are strate-
gic or transformational.
7
Organizations that
pursue such collaborations are also more likely
to partner with a broad array of companies, aca-
demic institutions, governments, NGOs and
multilaterals on sustainability matters.
The Strategic
Relevance of
Sustainability
In the late 1990s, many companies embarked
on their first sustainability forays. Often internal,
these efforts addressed low-hanging fruit such as en-
ergy efficiency or minimizing waste — essentially,
cost-cutting under a different name. But as the sus-
tainability issues that can affect business — such as
social instability, climate change and resource deple-
tion — become more important, companies realize
that collective action is necessary to protect the in-
terests of the company and society.
“Whether you’re a business or an organization, part
of civil society or a public sector voice, there is an un-
derstanding that complex problems require
perspectives from all three of these constituencies,”
comments Patrick Hynes, deputy director of mem-
ber relations at the Clinton Global Initiative. “The
number of organizations working together has in-
creased over the past few years along with the sense
of urgency to collaborate.”
Underscoring Hynes’ observation, our research
found that many companies are upping their partici-
pation in sustainability collaborations. Last year, for
example, nearly 40% of respondents reported that
their organizations were increasing the number of
collaborations with customers and suppliers. This
year, 37% say their companies are active in 10 or
more collaborative partnerships, and of those, 10%
are involved in more than 50 such partnerships.
These numbers will only grow: 46% of respondents
say they expect their company to be involved in
more than 10 collaborations in the near future (see
Figure 5).
To what extent is your organization engaged in the following types of
sustainability collaborations?
Great
extent
Moderate
extent
Some
extent
Small
extent
Not
at all
Strategic
Philanthropic
Opportunistic/Ad-hoc
43% 31% 16% 6% 3%
30% 24% 19% 12% 11%
20% 19% 21% 19% 16%
12% 25% 31% 19% 7%
Transformational (i.e., change the
rules of the industry and market)
Figures don't add up to 100% due to rounding and exclusion of those who responded “don’t know”
FIGURE 4: SUSTAINABILITY COLLABORATIONS ARE
MOST OFTEN STRATEGIC OR TRANSFORMATIONAL
Nearly three-quarters of respondents say their collaborations are strategic, and 54% say
they are transformational.
Collaborations
How many sustainability-related collaborations has your
organization been involved in over time?
40%
30%
20%
10%
0%
0
1-3
4-10
11-25
26-50
>50
Before 2000 2000-2005 2006-2010 2011-present In future
FIGURE 5: SUSTAINABILITY COLLABORATIONS ON
THE RISE
The number of sustainability-related collaborations has increased dramatically since 2000.
In this section, we delve into the details behind sus-
tainability collaborations — why and with whom
companies are collaborating, and how they approach
their partnerships.
THE STRATEGIC IMPETUS
TO COLLABORATE
Boosting brand reputation, improving product and
service innovation, fostering market transformation
and mitigating risk are the most important drivers of
sustainability-related collaborations (see Figure 6).
Brand or company reputation is often the strongest
motive for sustainability partnerships — 78% of sur-
veyed executives and managers rate it as very or
quite relevant. This finding is consistent with our
previous research
8
that examined the strategic driv-
ers of corporate sustainability.
The above finding could fuel the common criticism
that companies pursue sustainability as window
dressing rather than rigorously linking it to their
strategies. However, as Jason Clay, a senior vice
president at WWF, points out, reputation is more
than a PR issue. “In the 1970s, more than 80% of
corporate value was based on tangible assets,” he
says. “By 2009, 81% was based on intangible assets
such as brand and reputation. The broadening valu-
ation equation is bringing more companies to the
sustainability table.”
“Companies like Walmart can’t be sustainable on
their own,” adds Gregory Unruh, professor at George
Mason University. “To be sustainable, Walmart needs
a sustainable supply network, sustainable customer
base and even a sustainable economy in which to op-
erate. To achieve their goals, companies inevitably
become strategic partners in a global process of sus-
tainability transformation. Cutting a check to the
boss’s favorite charity doesn’t do it anymore.”
COLLABORATION IN ACTION
Ryan Schuchard, the manager of Business for Social
Responsibility’s (BSR) climate and energy practice,
says strategic and transformational needs are driving
private- and public-sector partnerships. The goals of
these collaborations are varied and can include:
• Developing standards and promoting
common practices
• Sharing information to foster discov-
eries or communicate externally
• Creating a consolidated base of power
to influence, e.g. policy makers and
suppliers
• Sharing in investments to save costs or
reduce risks
As strategic collaborations become more common-
place, prolonged tensions between corporations and
NGOs are waning. Greenpeace, for example, criti-
cized Asia Pulp & Paper’s supply chain practices,
causing customers to withdraw their orders. The
company made a bold strategic move to remake its
business model and how it acquires raw material — a
Why is your organization engaged in sustainability collaborations?
a5
Very
relevant
Quite
relevant
Somewhat
relevant
Slightly
relevant
Not
relevant
50% 28% 12% 6% 2%
39% 28% 17% 8% 6%
32% 25% 22% 12% 7%
30% 27% 20% 12% 9%
29% 24% 20% 13% 12%
25% 32% 22% 10% 9%
21% 31% 25% 13% 8%
21% 22% 22% 16% 16%
18% 24% 25% 18% 12%
Innovate products and services
Risk management
Expand into new markets
Stakeholder demand
Follow industry trends
Preempt regulatory action
Increase reputation and
brand building
Foster market transformation
towards sustainability
Exchange and share assets,
logistics and expertise
Figures don't add up to 100% due to rounding and exclusion of those who responded “don’t know”
FIGURE 6: WHY ORGANIZATIONS PURSUE SUSTAIN-
ABILITY PARTNERSHIPS
The reasons companies collaborate continue to favor brand and company reputation.
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 9
significant undertaking. To do so, company leaders
waved the white flag and invited Greenpeace into
the boardroom to help the company change its for-
estry sourcing practices.
“Never in our history would our shareholders sit in
the same room with a ‘radical’ NGO like Green-
peace,” says Aida Greenbury, a managing director.
“So it’s quite groundbreaking that we sit together in
our boardroom and discuss strategy and incorporate
their input.”
Stonyfield, the Vermont-based yogurt manufacturer,
also faced a strategic challenge — uncertainty in the
supply of its organic banana puree. The company
solved it through transformational collaborations
that have changed the face of how the company’s sup-
pliers go to market.
“We had been buying organic, rare bananas, but the
growers historically relied on downstream proces-
sors to make them into puree,” says Wood Turner,
former vice president of sustainability innovation.
“There has been considerable instability on the part
of those downstream processors, which made our
supply chain unreliable.”
To address the supply chain challenge, Stonyfield has
been working with the nonprofit Sustainable Food
Lab to develop small-scale fruit-processing opera-
tions.
9
“We decided — in collaboration with the
growers — to disrupt their business model by in-
stalling small-scale processing capability at the
grower-association level,” explains Turner. “Growers
are now not just responsible for bananas, but also for
processing and selling them to the global market-
place.” The collaboration solved Stonyfield’s supply
issue and gave the growers more independence and
access to a wider market.
10
The Israel-based company Netafim provides an-
other example of a transformational collaboration
that addresses a key sustainability issue: water scar-
city. Founded 60 years ago on a small kibbutz in the
Israeli desert, Netafim became the world’s largest
drip irrigation company by transforming the market
for water among small farmers in emerging markets.
“We introduced drip irrigation to agriculture,” says
Naty Barak, Netafim’s chief sustainability officer. “At
the time, we were struggling. Water was very limited,
but the concept of drip irrigation — which is orders
of magnitude more efficient than flood or sprinkle
irrigation — was unknown and required a great deal
of education and awareness. To make progress, we
partnered with government bodies, academia and
even with a small NGO.”
After Netafim achieved success in Israel and estab-
lished its business in the developed world, it turned
its attention to developing countries, which now ac-
count for the majority of its business. Netafim’s
fastest-growing market is India, where the compa-
ny’s average customer owns only two or three acres.
“We’re talking about small farmers, and there is no
way we can reach them on our own,” says Barak. “We
need partners who know the farmers and the culture
and can help us sell to and train them. For that, we
need government partners, NGOs and financing or-
ganizations such as the IFC or World Bank. There’s
no way we can do it alone.”
In an effort to transform the cell phone industry’s
standards for environmentally responsible green
phones, Sprint worked with the Underwriters Labo-
ratories Environment (ULE) and the Electronic
Product Environmental Assessment Tool (a resource
of the U.S. Environmental Protection Agency) to cre-
ate new standards for suppliers and purchasing.
“We wanted to market green mobile phones but un-
derstood that we can’t self-assess our own devices
and have credibility with consumers,” says Amy Har-
groves, director of corporate responsibility and
sustainability at Sprint. “People should question
green labels or claims that are not third-party certi-
fied. We needed a credible partner with scientific
testing capabilities to give our standards meaning.”
Sprint is currently expanding the standards to new
areas such as tablets and hot spots. “So, this is a re-
peatable model,” Hargroves says.
R E S E A R C H R E P O R T J O I NI NG F O R C E S
THE SPECTRUM OF
PARTNERSHIPS
Nearly 60% of respondents say that their sustain-
ability collaborations include other businesses, either
through industry associations, across industries
or within the same industry. Collaborations that
include academia (47%), NGOs (47%) and govern-
ment (39%) trail somewhat behind (see Figure 7).
Companies with more strategic and transforma-
tional collaborations tend to collaborate with a wider
range of organizations. Thirty-five percent of the or-
ganizations with the strongest focus on strategic and
transformational collaborations, for example, are
engaged with multilaterals, compared to an average
of 26% in companies that lack this focus.
The outdoor apparel company Timberland is work-
ing closely with the Leather Working Group to
ensure that the company sources leather from en-
vironmentally responsible tanneries. “Through our
work with the group, we can foster best practices
related to energy, chemical and water management
and make sure we only buy from silver- or gold-rated
tanneries,” says Betsy Blaisdell, manager of environ-
mental stewardship for Timberland. “The work also
reduced complexity in sourcing.”
11
The Electronic Industry Citizenship Coalition (EICC)
helps support the development of a responsible global
electronics supply chain by facilitating collaboration
and dialogue among companies, workers, govern-
ments, civil society, investors and academia. It is
bringing companies in different industries together to
exert more power over suppliers. EICC companies real-
ize that a coalition can send a strong message to suppliers
that they need to care more about where their resources
come from and under what conditions their products
are manufactured.
In Egypt, the Egyptian Junior Business Associa-
tion (in partnership with the United Nations Global
Compact) has a platform for collective action in
which small and medium-sized companies sign a
pledge to heed robust anticorruption policies and
practices. Similarly, companies in some sectors have
joined forces to ensure that their value chains meet
key requirements of the UN Guiding Principles on
Human Rights and Business.
12
For example, the
Thun Group, an informal circle of seven international
banks, published a discussion paper last year to frame
the issues.
13
A group of German and Swiss tourism
companies embarked on a similar initiative
14
that
garnered commitment to the responsibilities of mul-
tinational companies in the tourism industry.
If a company takes sustainability seriously, it is much
more likely to collaborate strategically to achieve its
sustainability aims. For example, companies that
have sustainability as a top management agenda
item are more than twice as likely to collaborate stra-
tegically than companies in which sustainability is
only somewhat or not important. In addition, those
companies that have sustainability as a top manage-
ment item and who collaborate strategically are up
to five times more likely to do the preparation re-
quired to ensure successful outcomes. This includes
steps like clearly defining roles, having reporting
frameworks in place and developing clear gover-
nance structures for partnerships.
With which of the following
entities does your organization
collaborate on sustainability?
Government Academia Industry
associations
Business
(across
industry)
Business
(same
industry)
NGOs/
NPOs
Multilaterals
39% 47% 59% 58% 57% 47% 26%
Public sector
Private sector
Civil society
45% 50% 65% 68% 61% 51% 35%
All companies
Companies heavily
engaged in strategic and
transformational collaborations
FIGURE 7: PRIVATE SECTOR COLLABORATIONS ARE
MOST COMMON
Companies that are strongly involved in strategic or transformational collaborations tend to
partner more across public and private sectors, as well as civil society.
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 11
Accessing the expertise and networks of relation-
ships are the primary benefits for companies to
engage in collaborations. Not surprisingly, compa-
nies are inclined to provide financial support in their
collaborations, but are more likely to benefit from
their partners’ political influence, standard-setting
authority and ability to impact public opinion (see
Figure 8).
In terms of supply-chain collaborations, the
strength of each partner is likely to differ across
industries. The automotive industry, with its long
history of collaborative R&D work and experience
with simultaneous engineering, stands out as one
of the strongest industries for sustainability col-
laborations. Given its exposure to sustainability in
the supply chain, consumer goods companies tend
to collaborate more on procurement initiatives. On
the other hand, many service-oriented industries,
such as media and financial institutions, lag behind
(see Figure 9). This pattern has been consistent over
several years of research: more resource-intensive
industries excel in corporate sustainability activities
compared to service industries.
Keys to
Success
Not surprisingly, our survey found that the more col-
laboration a company engages in, the more successful
its sustainability collaborations are reported to be.
The value of experience may be one of the reasons.
The more companies learn from their sustainability
partnerships, the more successful they are. “There
are definitely increasing returns to collaboration.
We’ve seen that the more you do it, the better you get
at it,” reports Ulrich Wassmer, professor of strategy at
EMLYON Business School.
For example, among respondents whose organi-
zations currently have one to three sustainability
collaborations, 43% say these collaborative ventures
What resources or benefits do your organization and your
organization’s sustainability partners provide?
Financial support
Expertise
Convening power
Political influence
Contacts/
Relationships
Local community
access
Ability to impact
public opinion
Standards
setting authority
What
companies
tend
to give
more of
What
companies
tend
to receive
more of
My organization
My organization’s
sustainability
partners
Difference
43%
26%
77%
68%
69%
65%
42%
41%
19%
35%
23%
33%
20%
25%
33%
41%
40%
12%
6%
1%
20%
29%
21%
47%
FIGURE 8: WHAT COMPANIES GIVE TO THEIR SUS-
TAINABILITY PARTNERS (AND WHAT THEY RECEIVE)
Companies are more likely to provide financial support, while benefitting from their
partners’ stakeholder influence and convening power.
Industry
Average
Healthcare
Automobiles
Commodities
Consumer products
Chemicals
Construction
Energy & utilities
Financial services
Industrial goods
Media & entertainment
Industrial services
Professional services
Telco & IT
2.82
2.83
3.14
2.73
2.67
3.40
3.02
3.13
2.57
2.96
2.74
3.17
3.00
2.67
2.95
3.57
2.84
2.53
3.41
2.44
2.95
2.73
2.54
2.92
2.74
3.30
2.58
2.89
2.57
3.10
2.83
2.88
2.55
3.67
2.51
2.88
2.70
3.11
2.51
2.80
3.25
2.83
2.43
2.80
3.37
2.67
2.76
3.08
2.77
2.81
2.82
3.10
2.95
2.69 2.72
2.79
2.97
3.17
3.02
2.80
2.73
2.93
3.08
2.82
3.02
3.58
2.75
3.00
3.57
2.59
2.80
3.27
2.84
2.77
3.06
3.25
3.04
Business
activity
A
v
e
r
a
g
e
R
e
s
e
a
r
c
h
&
d
e
v
e
l
o
p
m
e
n
t
S
u
p
p
l
y
/
p
r
o
c
u
r
e
m
e
n
t
M
a
n
u
f
a
c
t
u
r
i
n
g
/
s
e
r
v
i
c
e
d
e
l
i
v
e
r
y
D
i
s
t
r
i
b
u
t
i
o
n
/
l
o
g
i
s
t
i
c
s
P
r
o
d
u
c
t
u
s
e
R
e
c
y
c
l
i
n
g
/
r
e
-
u
s
e
o
f
p
r
o
d
u
c
t
To what extent are
your organization's
sustainability
collaborations
focused on the
following business
activities?
2.5 or less
4 = Collaborating to a
great extent
0 = Not collaborating
at all
3.25 or more
3.00–3.24
2.75–2.99
2.51–2.74
2.5 or less
FIGURE 9: RESOURCE-INTENSIVE INDUSTRIES
LEAD SUSTAINABILITY COLLABORATIONS
Business activities addressed by sustainability collaborations vary by industry, but
most often involve the product use phase.
R E S E A R C H R E P O R T J O I NI NG F O R C E S
are very or quite successful. Of those that have en-
gaged in more than 50, 95% report the same degree of
success (see Figure 10).
Knowledge sharing — both formal and informal — is
another key ingredient to ensuring that collabora-
tions are successful. Spending time informally on
immersive learning experiences in key locales, for ex-
ample, can help overcome cultural barriers that might
exist, while also building personal relationships that
foster good communication.
“We spend a lot of time in each locale getting to know
the people,” says BASF’s Bluethner. “We also have
local people on the ground in key countries and bring
them to Germany every year for training, and also
support and train them in production, marketing
and laboratorial work.”
INTERNAL COLLABORATIONS
Success with internal collaboration is another integral
component of success. “How a company partners inter-
nally has a lot to do with how it collaborates externally,”
says Turner of Stonyfield. “Internal collaborations can
be very successful in keeping people excited and aligned
with big picture sustainability goals. Internal collabora-
tions also create bridges inside the organization.”
Sprint’s Hargroves argues that developing internal
support can help external collaborations, and vice
versa. “People who are on sustainability teams, for the
most part, own nothing,” she explains. “So the only
way to be successful is to build partnerships — even
within the company.”
Hargroves also points out that bringing in external
voices can spur collaborations. One of those roles can
be played by what WWF’s Clay calls “extrapreneurs”
— the “honeybees” that “pollinate” multiple institu-
tions and open doors so people can see the potential.
SHARED LANGUAGE
Often, NGOs and corporations do not speak the same
language. Having a common dialect, however, is cru-
cial. Tima Bansal, director of Network for Business
Sustainability (NBS), talks about the need for “bound-
ary spanners,” people with the ability to help groups
bridge differences in language and culture. George
Mason professor Unruh makes the same case. “De-
ciphering a partner’s unique sustainability dialect,
15
and recognizing that you have your own, is an impor-
tant first step in a productive partnership,” he says.
Before it began working with Greenpeace, for example,
Asia Pulp & Paper believed it understood the language
of sustainability by following best practices and na-
tional regulations in China and Indonesia. However,
the company found that at first, it needed a “translator”
to understand what Greenpeace had to say. Eventually,
the language barrier fell, and trust began to develop
between the company and the NGO. Eventually,
Greenpeace helped Asia Pulp & Paper learn how to
become a more responsible company and take a lead-
ership role in the zero-deforestation movement.
DUE DILIGENCE
Michael Arnold, head of corporate partnerships at
WWF Switzerland, advocates that nonprofits should
“agree with the partner on a truly transformative
agenda to avoid controversies. Exerting a positive im-
In general, how successful are the sustainability
collaborations your organization is engaged in?
How many
sustainability-related
collaborations has
your organization
been involved in over
time? (2011-present)
26-50
11-25
>50
1-3
4-10
Very Quite Somewhat Slightly
8% 35% 40% 14%
17% 46% 29% 6%
21% 57% 18% 4%
35% 45% 18% 2%
50% 45% 5%
Figures don't add up to 100% due to rounding and exclusion of those who responded “not at all” or “don’t know”
FIGURE 10: GREATER EXERIENCE WITH COLLABORA-
TIONS LEADS TO MORE SUCCESS WITH EACH
Companies that are involved in more collaborations tend to assess those collaborations
as more successful.
THE ANALYTICS MANDATE • MIT SLOAN MANAGEMENT REVIEW 13
pact should be the primary reason to engage with the
private sector.” Like many nonprofit leaders and ex-
perts, Arnold believes that the private sector has to be
involved if today’s challenges are to be solved.
16
“Unfortunately, many partnerships fail unnecessar-
ily in an early stage” says Olivier Jaeggi, managing
partner at ECOFACT, a company specializing in
reputational, environmental and human rights risk
assessments. “The partners might fail to establish
trust and overcome internal concerns about things
such as differences in their respective organizational
cultures, the potential partner’s intentions or reputa-
tional risks that might result when engaging with the
partner.” NGOs, for example, may be wary of part-
nering with a corporation that has ignored human
rights issues in the past unless they are convinced that
the company is serious about changing its behaviors.
Businesses and nonprofit organizations should start
with a structured discussion of the deal: Is it a good
opportunity? What is the best solution from a purely
business or NGO perspective?
Once these questions are settled, the conversation
can turn to controversial issues such as the ability
and willingness to commit to and monitor certain
standards. “Talking about reputational risk comes
second,” states Jaeggi. “For example, if you, as an
NGO, come to be criticized, would you be able to ex-
plain how you assessed the potential partnership?”
Clarifying one topic after the other in a thoughtful,
step-by-step manner can avoid deadlock in a discus-
sion that can become very complex.
THE RIGHT ENTRANCE AND EXIT
STRATEGIES
Successful collaborations often have explicit en-
trance and exit strategies for certain partners,
allowing them to focus on the parts of the process for
which they are best suited. Foundations, for exam-
ple, may come in during the early stages and catalyze
the relationships. “There are instances when there is
a need for a sort of rocket propulsion from one actor
on the front end, but then at some point they de-
tach,” says Patrick Hynes, deputy director of member
relations at CGI. “Not all partners need to be in-
volved at all times.”
And getting the timing right from the outset matters.
“It is important to focus up front on the ending,” says
Shelly Esque, vice president of legal and corporate
affairs at Intel and chair of the board of the Intel
Foundation. “It avoids the dilemma of walking away
feeling the job is not done, or feeling that we left too
early or stayed too long.”
PEOPLE MATTER
Finding the right people is crucial. In collaborations
that span multiple boundaries, “getting the system in
the room”
17
is important: that is, making sure every
relevant stakeholder group is part of the process.
Knowing what needs to be achieved is perhaps the
most powerful screening technique for finding the
right people for partnerships.
Intel’s Esque believes that creating deep trust with
partners is indispensable, especially in the beginning.
“I find that most collaborations fall apart because the
early commitment work isn’t done,” she says. “There
should always be clarity around expectations, pro-
cess, language and measurement.”
Collaboration is ultimately about building relation-
ships, says Stonyfield’s Turner. As he puts it: “I find that
the best collaborations come out of existing relation-
ships. You spend a lot of time talking to colleagues at
other businesses and organizations about what needs
to be accomplished. In many ways, that’s how you start
to move things forward. It’s an iterative process.”
Selecting the right partners in a process that Esque
calls “matchmaking” makes a real difference. When
Intel launched its digital literacy program for young
women in sub-Saharan Africa, it needed the advice of
local partners, including community players and local
governments. “When you cast a wide net for partners
and meet with a lot of different organizations, probably
R E S E A R C H R E P O R T J O I NI NG F O R C E S
the majority of them are not a good fit,” she says. “And
that’s okay, because we are all being really clear about
what we want to achieve. Many organizations hesitate
there, because they don’t want to turn people away.”
BOARD ENGAGEMENT
Getting the board of directors on board is another
driver of success. As we pointed out in the introduc-
tion, an engaged board is a predictor of successful
sustainability collaborations: In companies where
boards are perceived as active supporters, 67% of re-
spondents say collaborations are very or quite
successful. In companies where the board is not en-
gaged, the rate of success is less than half that (see
Figure 11).
BASF’s recently introduced accelerators program,
which aims to turn all products into sustainability
all-stars, is the fruit of a carefully planned approach
to engaging its board. BASF established a steering
initiative for sustainable solutions that combined a
“top-down” perspective — driven by a sustainability
board chaired by a member of the board of directors
— with a “middle-out” perspective, where every
business unit assesses its own products against strict
sustainability criteria.
The process was deliberate and moved step by step.
To begin, BASF established a corporate sustainabil-
ity board, which includes 12 company presidents.
The sustainability board then made an initial pro-
posal to the board of executive directors to review all
products through the lens of sustainability, which
was very positively received. The sustainability
board then went to the business units to secure buy-
in from their leaders and draft strategies for making
needed changes.
Armed with business-unit specifics and challenges,
the sustainability board then returned to the board
of directors and presented their findings. It got a
green light to conduct deep dives into core busi-
nesses and create a “sustainable solutions approach”
(the accelerators program) that would encompass
every product line in the company.
18
Getting the
Board On
Board
Boards have yet to engage sustainability efforts, even
though sustainability has become a top management
agenda item. This is a real leadership problem
according to Integrated Governance: A New Model of
Governance for Sustainability, a comprehensive 2014
report on sustainability and governance by the United
Nations Environmental Programme Finance Initiative
(UNEP FI)
19
:
As companies increasingly recognize the need to
develop a sustainable strategy, where sustainabil-
ity issues are integrated into the core of the
business model, a respective need is created for a
governance model that is able to supervise the
formulation and execution of such a strategy.
FIGURE 11: BOARD SUPPORT IS LINKED TO
COLLABORATION SUCCESS
Companies with supportive boards are more likely to rate their collaborations as
successful.
In general, how successful are the sustainability
collaborations your organization is engaged in?
Does the board
actively support your
organization’s
sustainability related
collaborations?
Yes
No
Very Quite Somewhat Slightly
21% 46% 25% 5%
6% 26% 42% 26%
Figures don't add up to 100% due to rounding and exclusion of those who responded “not at all” or “don’t know”
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 15
LACK OF BOARD ENGAGEMENT
Our survey results show that only 22% of manag-
ers perceive that their boards provide substantial
oversight on sustainability issues — and our study
is not the only research to find tepid board support
for sustainability.
The Integrated Governance report analyzed 2011
Bloomberg corporate data on 60,000 businesses, and
found that less than 2% of companies that report en-
vironmental, social and governance information
had an executive or non-executive director with re-
sponsibility for sustainability.
20
Only 374 companies
had a sustainability committee that reported directly
to the board, and none of them had members who
were actually on the board.
21
A different research
review indicated that no more than 10% of U.S. pub-
lic company boards have a committee dedicated
solely to corporate responsibility.
22
The Integrated Governance report states that such
“low numbers suggest that most companies still have
not taken responsibility for sustainability issues at
the highest governing body of the corporation.”
23
Paul Polman, CEO of Unilever, put the issue even
more succinctly: “Boards are a latent resource.”
BARRIERS TO BOARD
ENGAGEMENT
Based on our survey and interviews, the strongest
barriers to greater board engagement seem to be:
unclear financial impact, a lack of sustainability ex-
pertise among board members, other priorities,
short-termism and the view that boards should
focus on shareholder value.
At many companies, especially large public ones,
many directors believe — mistakenly — that maxi-
mizing shareholder value is a company’s legal
obligation or director’s fiduciary responsibility. One
example of recent research spotlighting this error is a
2010 Harvard Business Review article, “The Myth of
Shareholder Capitalism,”
24
which sums up the results
of a review of 100 years of legal theory and precedent
by stating: “there is no legal basis for the idea of share-
holder supremacy,” the notion that shareholders own
the corporation. Another is law professor Lynn Stout’s
authoritative 2012 book, The Shareholder Value
Myth,
25
which offers robust evidence debunking the
view that maximizing shareholder wealth is a legal ob-
ligation of corporate directors.
Given that the average holding period for stocks is
about 7 months, down from some 7 years 40 years
ago,
26
directors that support strategies that focus
(primarily) on maximizing shareholder interests
may exaggerate a company’s focus on short-term
courses of action to the detriment of other impor-
tant corporate interests.
In a 2007 Journal of Business Ethics article, “Corporate
Directors and Social Responsibility: Ethics versus
Shareholder Value,”
27
34 directors from U.S. Fortune
200 companies volunteered to participate in an ethics
experiment. The directors were randomly placed into
two groups of equal size. Each group was assigned to
read and answer questions about two ethics case stud-
ies. One group was assigned to answer these questions
as if they were directors of a public corporation. The
other group was assigned to respond to the case studies
as if they were partners in a privately held partnership.
In both cases, the directors in the public corporation
group were much more likely (relative to the private
partnership group that had no perceived obliga-
tion to maximize profits) to advise management to
cut down a mature forest or release dangerous un-
regulated toxins into the environment in order to
increase profits. The author concluded that “direc-
tors recognize the ethical and social implications
of their decisions, but they believe that current cor-
porate law requires them to pursue legal courses of
action that maximize shareholder value.”
28
OVERCOMING THE BARRIERS
Overcoming barriers to board-level focus on sus-
tainability may require a shift in thinking about the
16 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
board oversight role. “Once sustainability is taken
seriously as a strategic issue,” says John Ruggie, the
Berthold Beitz Professor in Human Rights and In-
ternational Affairs at Harvard’s Kennedy School of
Government, “it becomes something that has to be
driven clearly across all business units and func-
tions. The board’s oversight role is really much
broader than simply focusing on CSR or the carbon
footprint of the company.”
Improving board expertise can be as straightforward
as appointing new members to the board. For in-
stance, Norwegian fertilizer giant Yara made a
deliberate effort to boost its sustainability expertise
in 2013 by appointing Geir Isaksen to its board. As
former CEO of Cermaq, an aquaculture company
based in Canada, Isaksen had led the company’s ef-
forts to create an integrated operating model that
balanced sustainability and financial results.
30
Bolstering board expertise with an external advisory
board is another approach. Kimberly-Clark’s CEO,
Tom Falk, for example, supported the creation of a
seven member external advisory board, all of whom
are experts in different aspects of sustainability. “We
used to be very inwardly focused and thought we
had all the answers and knew where we needed to
go,” said Falk. “We had a lot of smart people working
on sustainability. But when we opened up our efforts
to some NGOs and our outside advisory board, we
learned how to listen better.”
Integrating sustainability into the duties of the overall
board and established board committees — such as
compensation, governance, audit and nominating —
can also help steer the ship in different directions (see
Board Committees’ Responsibilities). In addition, a
separate sustainability committee including current
board members can be charged with identifying and
addressing material sustainability challenges. Nike’s
board, for instance, created a corporate responsibility
committee in 2001 to address controversies and
growing criticism of its supply chain. According to
Harvard Business School professor Lynn Paine, the
independent committee was able to “highlight
strengths and weaknesses in management’s thinking
and point to critical communication and execution
challenges.”
31
Paine concludes that there’s a broader
lesson to be learned:
Those engaged in the mainstream corporate
governance discussion have been largely silent
Governance Committee
• Oversee matters of corpo-
rate governance, corporate
responsibility, sustainability (in-
cluding sustainability trends)
and the impact of environmen-
tal, social and governance
issues to the business.
• Review the director orienta-
tion and education program to
ensure the appropriate exper-
tise and knowledge are
present overall. Include train-
ing around sustainability.
• Assist in monitoring and re-
viewing corporate governance
and reputational risk exposures.
• Review company-wide poli-
cies regarding Corporate
Governance Principles.
Audit Committee
• Monitor the integrity of fi-
nancial statements and the
company’s accounting and fi-
nancial reporting processes.
• Oversee the company’s
compliance with legal and reg-
ulatory requirements.
• Ensure the risk management
process is comprehensive.
• Evaluate the performance of
the company’s independent au-
ditor and internal audit function.
• Discuss with management
and the independent auditor
the annual and quarterly finan-
cial statements, earnings
results, earnings guidance.
Compensation Committee
• Review and recommend re-
muneration arrangements for
the senior management, in-
cluding the CEO.
• Ensure that the organiza-
tion’s compensation plans are
appropriate to allow attraction
and retention of the best tal-
ent in the market.
• Ensure that there is no loss
of value for the shareholders
due to overly generous com-
pensation. Decide on the
structure of the compensation
plans (restricted stocks, op-
tions, bonuses etc.). Decide
on the incentive strategy
(short-term vs. long term per-
formance targets).
Nominating Committee
• Identify appropriate candi-
dates in the event of a board
vacancy.
• Review and recommend to
the board the criteria for a
board membership and the
desired competencies of
board members.
• Oversee the evaluation of
the performance of the board
and the management, includ-
ing the CEO.
ONE NEW MODEL: BOARD COMMITTEES’ RESPONSIBILITIES
29
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 17
on the subject of the board’s role in overseeing
corporate responsibility and sustainability …
In view of growing concern about business and
sustainability, and given the importance of
corporate responsibility for ongoing value cre-
ation, directors should be asking whether their
board’s oversight in those areas is sufficient.
32
Because short-termism is deeply entrenched in capi-
tal markets, it is no small matter to fight it in the
boardroom. MIT professor Robert G. Eccles has de-
veloped a promising approach that may help reduce
the focus on maximizing shareholder concerns so
boards can think broadly and act deliberately about
both long-term and short-term issues. In his recent
book, The Integrated Reporting Movement (with Mi-
chael P. Krzus), Eccles argues that boards should
articulate a meaningful story about which stake-
holders and material risks are most important to the
company’s long-term goals, and communicate that
story to the markets.
33
Eccles further comments:
Companies don’t have to be beholden to short-
termism. The first thing they can do is to have
their board issue an annual Statement of Sig-
nificant Audiences and Materiality, in which
they outline the relative importance of differ-
ent types of shareholders and stakeholders in
relationship to each other. This statement
would also outline the timeframes the com-
pany uses in making decisions relevant to each
audience. Since boards represent the corpora-
tion, and not just shareholders — which is the
common misperception — it would be good
governance for them to issue such a statement
so that everybody knows the role they see for
the company in society.
To help develop this idea, I’m working with
both the UN Global Compact and the Princi-
ples for Responsible Investment. One way to
address it is by incorporating this idea in the
new Board Program developed by the UN
Global Compact, which is a series of sessions
with boards of directors to help them shape
their companies’ sustainable strategies.
While the U.S. Securities and Exchange Commis-
sion (SEC) and securities commissions in other
countries require that companies report on “mate-
rial” information, very little guidance is given on
how to determine what is “material.” This is appro-
priate, since materiality is entity-specific and based
on judgment. The statement, as Eccles conceives it,
is a way for the company to explain what it considers
to be most material for purposes of resource alloca-
tion, shareholder and stakeholder engagement,
innovation, and reporting.
Conclusion:
The Path to
Success Is
Travelled With
Others
Almost one-third of the global economy passes
through a thousand large companies and their ex-
tended network of suppliers and partners: In 2012,
the world’s largest 1,000 companies generated $34
trillion in revenues. By comparison, the entire gross
world product was $85 trillion in 2012.
With 73 mil-
lion employees, the global 1,000 commanded some
50% of the world’s market capitalization in 2012. Ac-
cording to the UNEP Finance Initiative, “the Global
1,000 can now influence billions of people around
the world, from employees to suppliers, customers
and even regulators.”
34
With such enormous influence, however, comes
equally daunting vulnerability. “We are at a critical
juncture — economically, socially and environmen-
tally,” United Nations Secretary-General Ban
Ki-moon has said in public remarks. “More than 1 bil-
lion people lack access to food, electricity or safe
18 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
R E S E A R C H R E P O R T J O I NI NG F O R C E S
drinking water. Most of the world’s ecosystems are in
decline. Gaps between rich and poor are widening.
Climate change and population growth are expected
to compound these challenges. The threat to prosper-
ity, productivity and our very stability is clear. Market
disturbances, social unrest, ecological devastation,
and natural and manmade disasters near and far di-
rectly affect your business — your supply chains,
capital flows, your employees and your profits.”
For many companies, it is simply not enough to
manage for such risks with scenario planning and
other risk management tools. Many businesses are
realizing that they need to change the risk vectors at
their source if they are to avoid such material risks to
their corporate strategies and their long-term fu-
tures. No single company can surmount these risks
by itself. As our research found, the path to sustain-
able success is travelled with others.
The impetus to collaborate explains why BASF and
Intel took the initiative to supplement government
efforts to ensure the prevalence of healthy, educated
workers and consumers. These companies realized
they must help lead the effort and not just manage to
a scenario of flat or declining business prospects.
By the same token, governments are recognizing the
importance of healthy businesses for their respective
societies. To ensure that health, they are shoring up
the prospects of their commercial sectors. In January
2013, for example, the Chinese government launched
an anticorruption campaign that led to the removal
of 17 vice-ministers and the punishment of more
than 180,000 company officials deemed corrupt
throughout China.
35
Corporate support for long-term investments with-
out obvious short-term payback is controversial and
requires the highest levels of executive support. In
some cases, it takes downright courage.
Consider Apple CEO Tim Cook. In February 2014,
after representatives from the National Center for
Public Policy Research demanded that Apple dis-
close all of its activities around energy and
sustainability and refrain from doing anything that
doesn’t add directly to its bottom line, Cook’s re-
sponse made the news. “When we work on making
our devices accessible by the blind, I don’t consider
the bloody ROI,” he said. “[Apple does] a lot of things
for reasons besides profit motive. We want to leave
the world better than we found it … If you want me to
do things only for ROI reasons, you should get out of
this stock.”
36
Bringing sustainability into the boardroom will offer
guidance to senior managers as they grapple with
the risks and opportunities that affect their futures.
But more important, board support will ensure that
the issues that matter most to organizations and
their market environments are taken seriously with
a long-term perspective.
As Peter Solmssen, former counsel for Siemens, put it,
“Sustainability is about survival. It means clean water
and clean air, but it also means having an economic
system that works for everyone. It means having re-
sponsible citizens, both corporate and individual.”
37
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 19
REFERENCES
1. Institute of Directors in Southern Africa. “The King Code
of Governance for South Africa,” http://c.ymcdn.com/sites/
http://c.ymcdn.com/sites/www.iodsa.co.za/resource/
collection/94445006-4F18-4335-B7FB-7F5A8B23FB3F/
King_Code_of_Governance_for_SA_2009_Updated_
June_2012.pdf.
2. Jaeggi, O. “Human Rights: The Next Frontier.”http://
sloanreview.mit.edu/article/human-rights-the-next-frontier/.
3. “New UN program tasks corporate boards with heading
sustainability efforts,” The Guardian, November 19, 2014,
http://www.theguardian.com/sustainable-business/2014/
nov/19/united-nations-boards-directors-sustainability/.
4. Food and Agriculture Organization of the United Na-
tions. The State of Food Insecurity in the World 2014. http://
www.fao.org/publications/sofi/en/.
5. Macondo. Global Compact International Yearbook 2010.
Munster: Macondo Publishing GmbH, 2010: 72.
6. Transformational collaborations were defined in the sur-
vey as “changing rules and markets, i.e., engagement that
changes the rules of the game.”
7. Survey respondents who characterized their collabora-
tions as strategic or transformational “to a great extent”
8. Kiron, D., Kruschwitz, N., Haanaes, K., Reeves, M., Goh,
E. “The Innovation Bottom Line: Findings from the 2012
Sustainability & Innovation Global Executive Study and Re-
search Report.” http://sloanreview.mit.edu/reports/
sustainability-innovation/.
9. Sustainable Food Laboratory. “Bringing Value Closer to the
Farm: The CAPE Project.” http://www.sustainablefoodlab.
org/newsletter/17-news-spring10/242-newsletter-may-2013.
10. Turner, W., Kruschwitz, N. “Working Toward Totally
Transparent Yogurt.” http://sloanreview.mit.edu/article/
working-toward-totally-transparent-yogurt/.
11. Blaisdell, B., Kruschwitz, N. “New Ways to Engage Em-
ployees, Suppliers and Competitors in CSR.” http://
sloanreview.mit.edu/article/new-ways-to-engage-employ-
ees-suppliers-and-competitors-in-csr/.
12. Jaeggi, O. “Human Rights: The Next Frontier.” http://
sloanreview.mit.edu/article/human-rights-the-next-frontier/.
13. The Thun Group. UN Guiding Principles on Business
and Human Rights: Discussion Paper for Banks on Implica-
tions of Principles 16–21 (October 2013). http://www.
menschenrechte.uzh.ch/publikationen/thun-group-discus-
sion-paper-final-2-oct-2013.pdf.
14. Roundtable for Human Rights in Tourism: About Us.
http://www.menschenrechte-im-tourismus.net/en/ueber-
uns.html.
15. Unruh, G. “The Sustainability Insurgency” [series].
http://sloanreview.mit.edu/tag/sustainability-insurgency/.
16. Jaeggi, O. “How Nonprofit Organizations Use Reputa-
tional Risk Management.” http://sloanreview.mit.edu/
article/how-nonprofit-organizations-use-reputational-risk-
management/.
17. Senge, P., Smith, B., Kruschwitz, N., Laur, J., Schley, S.
The Necessary Revolution. New York: Crown Publishing/
Random House, 2007; p. 234.
18. Post, R. “For BASF, Sustainability Is a Catalyst.”
http://sloanreview.mit.edu/article/for-basf-sustainability-
is-a-catalyst/.
19. United Nations Environment Programme (UNEP). Inte-
grated Governance: A New Model of Governance for
Sustainability. June 2014, p.6. http://www.unepfi.org/fil-
eadmin/documents/UNEPFI_IntegratedGovernance.pdf.
20. UNEP, Integrated Governance, p. 15.
21. From a total universe of about 60,000 companies, only
3,512 companies reported on at least one ESG measure
[Ibid, p. 15].
22. Paine, L.S. “Sustainability In the Boardroom: Lessons
from Nike’s Playbook.” Harvard Business Review 92, no.
7–8 (Jul–Aug 2014): 87–94.
23. UNEP, Integrated Governance, p. 15.
24. Heracleous, L., Lan, L.L. “The Myth of Shareholder
Capitalism,” Harvard Business Review 88, no. 4 (April
2010): 24. https://hbr.org/2010/04/the-myth-of-shareholder-
capitalism/ar/1.
25. Stout, L.A. The Shareholder Value Myth: How Putting
Shareholders First Harms Investors, Corporations, and the
Public. San Francisco: Berrett-Koehler Publishers, 2012.
26. Gore, A. The Future: Six Drivers of Global Change. Ran-
dom House, 2013: p. 35. The given source for this factoid
is: Henry Blodget, “You’re an investor? How Quaint,” Busi-
ness Insider, August 8, 2009. http://www.businessinsider.
com/henry-blodget-youre-an-investor-how-quaint-2009-8.
27. Rose, J.M. “Corporate Directors and Social Responsi-
bility: Ethics versus Shareholder Value,” Journal of
Business Ethics, 73 no.3 (July 2007) 319-331.
28. Ibid, p. 319.
29. This is adapted from the UNEP Integrated Governance
Report.
30. “Cermaq presents solid sustainability results.” http://
www.wallstreet-online.de/nachricht/3140551-cermaq-
presents-solid-sustainability-results.
31. Paine, “Sustainability In the Boardroom,” p. 90.
32. Ibid, p. 88.
33. Eccles, R.G., Krzus, M.P., Ribot, S. “The Integrated Re-
porting Movement: Meaning, Momentum, Motives, and
Materiality.” New York: John Wiley and Sons, 2014.
34. UNEP, Integrated Governance, p. 8.
35. “Corruption: Less Party Time,” The Economist, January
25, 2014. http://www.economist.com/news/
china/21595029-communist-partys-anti-graft-campaign-
has-had-surprising-impact-new-report-shows-how.
36. Kruschwitz, N. Is Hostility to Blame for Sustainability’s
Leadership Gap? http://sloanreview.mit.edu/article/is-hos-
tility-to-blame-for-sustainabilitys-leadership-gap/.
37. Watson, B. “Siemens and the Battle Against Bribery
and Corruption,” The Guardian, September 18, 2013. http://
www.theguardian.com/sustainable-business/siemens-
solmssen-bribery-corruption.
20 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT.
R E S E A R C H R E P O R T J O I NI NG F O R C E S
Appendix
There have been a number of studies, both qualitative and quantitative, on what makes for
successful sustainability collaborations. This table is a selection of several key findings.
MIT SMR, BCG and UN Global
Compact 2014 Research Project
Forum for the Future Network for Business
Sustainability
Kellogg Innovation
Network
• Success with internal collaboration
• Have a shared language
• Secure board engagement
• Timely engagement (not all players
have to be involved all the time)
• People matter
• Due diligence
• Right entrance and exit strategies
Gray, B., & Stites, J.P. 2013. Sustainability through
Partnerships: Capitalizing on Collaboration.
Network for Business Sustainability
Sally Uren, “5 steps to successful
collaboration,” Greenbiz, February 19, 2013
Peter Bryant, Senior Fellow - Kellogg
Innovation Network (KIN) at the Kellogg
School of Management
• Identify the right type of
collaboration
• Secure permission to play
• Use great process, but make it
flexible
• Allow time
• Reset the
pre-competitive/competitive dial
• Adopt a problem-centric rather than a
firm-centric model of stakeholders
• Frame the partnership as a learning
process
• Construct fair processes and manage
conflicts
• Don’t expect to come up with a quick
solution
• Ensure voice for all participants
• Set evaluation criteria
• Allow time for representatives’
constituencies to review and ratify
agreements
• Develop leaders competent in
partnership skills
• Evaluate whether you’ve selected the
correct partner
• Consult a wide array of stakeholder
Involve reputable stakeholders early
• Keep groups small – not exceeding 40
people
• Attract the right people from various
stakeholders
• Create a trusted environment
• Secure visionary leadership from a
CEO within the industry
• Build a thoughtful approach to
conversations/ step-by-step process
guide
SUCCESS FACTORS FOR COLLABORATION
The Survey:
Questions & Responses
1. Which of the following best describes the organization where you are employed?
(Respondents could only choose a single response)
Company
Academia
Government/Public sector
Non-governmental/Non-profit organization (NGO/NPO)
Other
Industry association
Multilateral organization (e.g., United Nations)
68%
13%
7%
6%
4%
2%
1%
* In some instances figures do not add
up to 100 due to rounding.
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 21
2. Which of the following best describes your current position?
(Respondents could only choose a single response)
Senior manager
Middle manager
C-suite executive (e.g., CEO, CSO, CFO, CHRO)
Other
Front-line employee
Board member
29%
23%
19%
12%
12%
5%
3. How well informed are you about your
organization’s sustainability activities?
(Respondents could only choose a single response)
46% 43% 11% 0
Not
informed
at all
Not very
informed
Somewhat
informed
Fully
informed
4. Please indicate your level of agreement with the following
statement: In general, effectively addressing sustainability issues can
not be done alone but requires collaboration.
(Respondents could only choose a single response)
68% 22% 5% 3% 1% 1%
Agree
strongly
Agree
somewhat
Neither
agree nor
disagree
Disagree
somewhat
Disagree
strongly
Don’t
know
5. Is your organization engaged in
sustainability-related collaborations?
(Respondents could only choose a single response)
Don’t
know
No Yes
48%
33%
20%
Great
extent
Moderate
extent
Don’t
know
Some
extent
Small
extent
Not
at all
Strategic
Philanthropic
Opportunistic/Ad-hoc
41% 31% 17% 7% 3% 2%
30% 23% 19% 13% 10% 4%
18% 18% 21% 20% 19% 4%
11% 24% 32% 18% 9% 6%
6. To what extent is your organization engaged in the following types of
sustainability collaborations?
(Respondents could only choose a single response for each topic)
Transformational (i.e., change the
rules of the industry and market)
Very
relevant
Quite
relevant
Don’t
know
Somewhat
relevant
Slightly
relevant
Not
relevant
46% 29% 13% 7% 4% 1%
37% 27% 18% 10% 8% 1%
32% 25% 21% 12% 8% 2%
27% 27% 21% 13% 10% 2%
27% 30% 21% 11% 9% 2%
26% 23% 19% 14% 17% 2%
21% 30% 24% 14% 10% 2%
19% 25% 24% 16% 13% 3%
19% 22% 21% 16% 19% 4%
7. Why is your organization engaged in sustainability collaborations?
(Respondents could only choose a single response for each topic)
Innovate products and services
Risk management
Stakeholder demand
Expand into new markets
Follow industry trends
Preempt regulatory action
Increase reputation and
brand building
Foster market transformation
towards sustainability
Exchange and share assets,
logistics and expertise
22 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
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Great
extent
Moderate
extent
Don’t
know
Some
extent
Small
extent
Not
at all
Environmental issues
(e.g., climate change, pollution)
Social issues (e.g., women
empowerment, poverty eradication)
Governance issues
(e.g., corruption)
46% 23% 16% 9% 5% 1%
38% 28% 18% 11% 5% 1%
29% 21% 19% 15% 13% 3%
8. To what extent do your organization’s collaborations address the following
sustainability issues?
(Respondents could only choose a single response for each topic)
Great
extent
Moderate
extent
Don’t
know
Does not
apply
Some
extent
Small
extent
Not
at all
Recycling/Re-use of product
Research & development
Product use
Manufacturing/Service delivery
Supply/Procurement
Distribution/Logistics
37% 23% 15% 12% 8% 2% 5%
36% 22% 15% 13% 9% 2% 2%
36% 27% 15% 9% 6% 2% 5%
35% 26% 16% 10% 8% 2% 4%
32% 28% 18% 12% 6% 2% 2%
24% 27% 18% 13% 11% 3% 4%
9. To what extent are your organization’s sustainability collaborations focused on
the following business activities?
(Respondents could only choose a single response for each topic)
10. What types of sustainability collaborations is your organization engaged in?
(Respondents were allowed to choose multiple responses)
Local partnerships
Regional partnerships
Corporate responsibility initiatives
Global partnerships
Innovation partnerships
Mobilization of resources
Advocacy campaigns
Other
Don’t know
74%
64%
61%
48%
47%
29%
27%
4%
1%
11. What resources or benefits do your organization and your organization’s sustainability
partners provide? (Respondents were allowed to choose multiple responses.)
Expertise
Contacts/relationships
Local community access
Financial support
Ability to impact public opinion
Standards setting authority
Political influence
Convening power
Other
Don't know
80%
68%
71%
66%
46%
42%
40%
33%
38%
43%
25%
32%
24%
38%
23%
27%
2%
1%
2%
5%
My organization
My organization’s
sustainability partners
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 23
12. How many sustainability-related collaborations has your organization been involved in over time?
(Respondents could only choose a single response for each topic)
2
9
%
3
7
%
2
0
%
7
%
2
%
2
%
3
%
2
6
%
2
5
%
2
4
%
1
3
%
7
%
2
%
4
%
1
9
%
1
4
%
2
4
%
2
2
%
1
1
%
6
%
5
%
8
%
1
%
2
1
%
3
1
%
1
8
%
1
0
%
1
1
%
2
4
%
0
%
6
%
2
4
%
1
7
%
1
0
%
1
8
%
Don’t know
0
1-3
4-10
11-25
26-50
>50
Before 2000 2000-2005 2006-2010 2011-present In future
13. What has your organization done to develop and carry out its sustainability
collaborations?
(Respondents were allowed to choose multiple responses)
Identify clear business case
Define roles for each partner
Assure alignment among partners on goals/objectives
Due diligence in partner selection
Sign contractual agreements
Create monitoring framework
Develop clear governance structure
Design partnership to be scaled up/replicated
Secure financing over life of collaboration
None of the above
Don’t know
63%
53%
52%
48%
46%
44%
42%
34%
28%
2%
6%
14. In general, how successful are the sustainability collaborations
your organization is engaged in?
(Respondents could only choose a single response)
18% 42% 29% 8% 0 4%
Very Quite Somewhat Slightly Not at all Don’t
know
24 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
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16. Please indicate your level of agreement with the following
statement: The Board of Directors should play a strong role in my
organization’s sustainability efforts.
(Respondents could only choose a single response)
66% 21% 7% 3% 1% 2%
Agree
strongly
Agree
somewhat
Neither
agree nor
disagree
Disagree
somewhat
Disagree
strongly
Don’t
know
17. To what extent is the Board of Directors engaged in your
organization’s sustainability efforts?
(Respondents could only choose a single response)
17. To what extent is the Board of Directors engaged in your
organization’s sustainability efforts?
(Respondents could only choose a single response)
22% 20% 15% 15% 13% 15%
To some
extent
To small
extent
To moderate
extent
To great
extent
Not at all Don’t
know
18. How is sustainability addressed at your organization’s Board level?
(Respondents could only choose a single response)
Entire Board oversees sustainability
Appointed Board member oversees sustainability
Dedicated Board sustainability committee
Other
Don’t know
18%
17%
17%
14%
8%
5%
20%
Sustainability as extended focus area of Board committee (e.g.,
audit & risk)
Mixed sustainability committee of Board and non-Board
members
15. Why isn’t your organization engaged in sustainability-related collaborations?
(Respondents were allowed to choose multiple responses)
Not a priority
Lack of top management support
Lack of resources
No link to business value
Lack of knowledge on which institutions to collaborate with
Lack of capabilities on how to collaborate
Lack of appropriate collaboration opportunity
Other
Don’t know
38%
35%
32%
30%
29%
27%
26%
18%
6%
2%
Does not add concrete value to organization’s sustainability
agenda
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 25
19. How often does your organization’s entire Board
discuss sustainability issues?
(Respondents could only choose a single response.)
10% 21% 41% 3% 26%
At each
Board
meeting
Regularly,
but not at
every Board
meeting
From time
to time, as
needed
Other Don’t
know
Fully
involved
Quite
involved
Don’t
know
Somewhat
involved
Slightly
involved
Not
involved
at all
24% 23% 22% 14% 7% 9%
18% 21% 24% 18% 9% 11%
16% 21% 23% 18% 11% 12%
10% 19% 24% 20% 13% 14%
10% 18% 22% 20% 16% 14%
10% 20% 24% 20% 15% 12%
7% 15% 20% 20% 20% 18%
6% 13% 16% 18% 29% 19%
20. How involved is your organization’s Board of Directors in the following practices?
(Respondents could only choose a single response for each topic)
Monitoring sustainability metrics
Integrating sustainability into
business strategy
Evaluating long term impact of
sustainability on business model
Active dialogue with diverse
stakeholder groups
Auditing non-financial/
sustainability performance
Promoting sustainability
capabilities in executive
recruitment
Linking executive remuneration to
sustainability performance
Monitoring ethics/codes of
conduct
21. How does the Board of Directors factor in diverse stakeholder views regarding
sustainability issues?
(Respondents were allowed to choose multiple responses)
Regular dialogue between Board members and stakeholders
Board members with expertise on relevant stakeholder issues
Stakeholder representation on the Board
Sustainability experts present in Board meetings
Board does not factor in diverse stakeholder views
Escalation/grievance mechanisms directly to Board
Other
Don’t know
28%
28%
15%
15%
15%
12%
2%
24%
22. Does the Board actively support
your organization’s sustainability-
related collaborations?
(Respondents could only choose a single response)
Don’t
know
No Yes
64%
15%
21%
23. Why isn’t your organization’s Board of Directors engaged in sustainability?
(Respondents were allowed to choose multiple responses)
Not a priority for stakeholders
Financial impact unclear
Lack of capabilities of Board members on sustainability
Lack of support from Board members
Sustainability better managed at lower levels of organization
Other
Don’t know
59%
35%
25%
21%
11%
10%
15%
4%
My organization doesn’t include sustainability at Board level
but plans to do so
26 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
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24. Which of the following best describes the place that
sustainability has on your organization’s top manage-
ment agenda?
(Respondents could only choose a single response)
27% 12% 37% 15% 9%
Permanently
on top
management
agenda
Temporarily
on top
management
agenda
Somewhat
important, but
not on top
management
agenda
Not
important
Don’t
know
25. Has your organization’s business
model changed as a result of
sustainability?
(Respondents could only choose a single response)
Don’t
know
No Yes
31%
51%
17%
26. Overall, has your organization developed a clear business case
or proven value proposition for its approach to sustainability?
(Respondents could only choose a single response)
26% 19% 11% 8% 24% 12%
Yes Currently
trying to
Planning
to
Have tried
to, but too
difficult to
develop
No Don’t
know
27. How do you believe your organization’s
sustainability-related actions/decisions
have affected its profitability?
(Respondents could only choose a single response)
28% 25% 9% 38%
Added to
profit
Broken even–
Neither added
to nor
subtracted
from profit
Subtracted
from profit
Don’t
know
28. Regarding sustainability in your organization, does your organization have:
(Respondents were allowed to choose multiple responses)
Strong CEO commitment to sustainability
Clear responsibility for sustainability
Sustainability reporting
Integrated risk management
Strong Board-level oversight
Personal KPIs related to sustainability
Separate function for sustainability
Responsible person for sustainability per business unit
Chief sustainability officer (CSO)
None of the above
Other
Don’t know
39%
35%
34%
31%
23%
21%
17%
16%
15%
13%
10%
21%
2%
8%
Operational key performance indicators (KPIs) related to
sustainability
Link between sustainability performance and financial
incentives
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 27
29. What are the main obstacles to addressing sustainability issues more robustly?
(Choose up to 5)
(Respondents were allowed to choose multiple responses)
Competing priorities
Insufficient resources
Short-term thinking regarding planning and budgeting cycles
Lack of customer demand for sustainability strategies
Lack of regulation requiring sustainability strategies
Lack of government support to pursue sustainability strategies
Outdated mental models and perspectives on sustainability
Silo-focused thinking across business units or geographies
Opposition from executives or influential individuals
Opposition from investor community
Other
Don’t know
51%
39%
37%
36%
33%
28%
27%
27%
23%
21%
21%
19%
12%
8%
3%
5%
Difficulty quantifying intangible effects of sustainability (e.g.,
reputation)
Lack of framework to incorporate sustainability into core
business
Difficulty predicting customer response to sustainability
strategies
Lack of employees’ financial incentives for considering
sustainability
30. In which region does your organization primarily work?
(Respondents could only choose a single response)
32% 25% 15% 13% 8% 4% 3% 2%
Global* Northern
America
Europe Asia Latin
America
Africa Australasia Middle
East/
Northern
Africa *Primary business spread across three or more regions
31. Which of the following best describes your organization?
(Respondents could only choose a single response.)
40% 27% 11% 10% 4% 8%
Privately
owned
Publicly
traded
Fami-
ly-owned
Fully
state-owned
Partially
state-owned
Other
28 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
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32. What is your organization’s total headcount?
(Respondents could only choose a single response)
12% 23% 28% 9% 13% 6% 10%
<10 10–249 250–4,999 5,000-
9,999
10,000-
49,999
50,000-
100,000
>100,000
33. What are your company’s annual revenues (in US$)?
(Respondents could only choose a single response, company only)
21% 11% 15% 11% 35% 7%
<$5
million
$25–$250
million
$250
million–
$1 billion
$5–$25
million
>$1 billion Don’t
know
34. What was your company’s average operating/EBIT margin over
the last two years (2012/2013)?
(Respondents could only choose a single response, company only)
4% 12% 16% 14% 18% 38%
<0% 0–5% 5–10% >15% 10–15% Don’t
know
35. Does your organization have a
sustainability strategy?
(Respondents could only choose a single response)
Don’t
know
No Yes
64%
27%
9%
36. Is pursuing a sustainability-
oriented strategy necessary to be
competitive?
(Respondents could only choose a single response)
Yes
No
Not currently,
but in future
Don’t
know
60%
14%
22%
4%
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 29
Very
strong
Strong Don’t
know
Average Weak Very
weak
Sustainability vision and strategy
Overall sustainability performance
Sustainability collaborations
19% 27% 26% 18% 7% 3%
13% 27% 37% 15% 5% 3%
13% 22% 28% 23% 11% 4%
12% 25% 31% 22% 7% 3%
12% 23% 30% 22% 9% 5%
12% 26% 35% 17% 7% 4%
11% 22% 29% 24% 11% 3%
37. How would you rate your organization’s performance on each of the following?
(Respondents could only choose a single response for each topic)
Sustainability innovation and
experimentation
Organization and governance
for sustainability
Net sustainability impact (e.g.,
reduced resource consumption,
improved labor conditions)
Monitoring and reporting of
sustainability performance
Very
urgent
Quite
urgent
Don’t
know
Somewhat
urgent
Slightly
urgent
Not
urgent
at all
Corruption
Labor conditions
Human rights
Resource scarcity
Water access
Climate change
28% 17% 16% 14% 19% 6%
22% 22% 22% 15% 15% 4%
19% 20% 21% 17% 20% 5%
18% 20% 21% 16% 20% 5%
17% 15% 17% 16% 30% 5%
15% 14% 17% 17% 32% 5%
38. How urgent are the following issues to your organization?
(Respondents could only choose a single response for each topic)
39. With which of the following entities does your organization collaborate on
sustainability (company only)? Identify up to 3 collaboration configurations which have been important
for your organization (e.g., if you have a collaboration with a university, check "Academia").
(Respondents were allowed to choose multiple responses.)
Industry association
Business (across industries)
Business (same industry)
Non-governmental/Non-profit organization (NGO/NPO)
Academia
Government
Multilateral organization (e.g., United Nations)
Don't know
Does not apply
60%
59%
59%
48%
48%
40%
27%
9%
7%
30 MIT SLOAN MANAGEMENT REVIEW • THE BOSTON CONSULTING GROUP & THE UNITED NATIONS GLOBAL COMPACT
R E S E A R C H R E P O R T J O I NI NG F O R C E S
40. Are any of the collaboration
configurations above with publicly
recognized institutions (such as
CERES, Global e-Sustainability
Initiative or Roundtable on Sustain-
able Palm Oil)?
(Respondents could only choose a single response
(company only))
No Yes
38%
62%
41. With which of the following entities does your organization collaborate on
sustainability (company only)? Identify up to 3 collaboration configurations which have been important
for your organization (e.g., if you have a collaboration with a university, check "Academia").
(Respondents were allowed to choose multiple responses.)
Business
Government
Academia
Non-governmental/Non-profit organization (NGO/NPO)
Industry association
Multilateral organization (e.g., United Nations)
Don't know
Does not apply
67%
66%
64%
55%
51%
31%
8%
6%
42. Are any of the collaboration
configurations above publicly
recognized institutions (such as
CERES, Global e-Sustainability
Initiative or Roundtable on Sustain-
able Palm Oil)?
(Respondents could only choose a single response
(company only))
No Yes
42%
58%
ACKNOWLEDGMENTS
Daniel Aronson, founder, Valutus; Christine Bader, author, The Evolution of a Corporate Idealist:
When Girl Meets Oil; Tima Bansal, director, Network for Business Sustainability; Naty Barak,
chief sustainability officer, Netafim; Betsy Blaisdell, senior manager of environmental
stewardship, The Timberland Company; Andreas Bluethner, director of food fortification &
partnerships, BASF; Peter Bryant, partner, Clareo Partners and senior fellow, Kellogg Innovation
Network (KIN), Kellogg School of Management; Jason Clay, senior vice president, WWF; Robert
Eccles, professor, MIT; Shelly Esque, vice president of legal and corporate affairs, Intel and chair
of the board of the Intel Foundation; Thomas J. Falk, CEO, Kimberly-Clark; Brian Gonzalez,
director of global education sales, Intel; Aida Greenbury, managing director of sustainability &
stakeholder engagement, Asia Pulp & Paper; Amy Hargroves, director of corporate responsibility,
Sprint; Dan Hesse, former CEO, Sprint Corporation; Patrick Hynes, deputy director of member
relations, Clinton Global Initiative; Jason Jay, director of the MIT Sloan Initiative for Sustainable
Business and Society, MIT Sloan School of Management; Michael Meehan, CEO, Global
Reporting Initiative; Paul Polman, CEO, Unilever; John Ruggie, Berthold Beitz Professor in
Human Rights and International Affairs, Kennedy School of Government at Harvard University;
Ryan Schuchard, associate director, climate change, Business for Social Responsibility; Wood
Turner, former vice president of sustainability innovation, Stonyfield Farm; Ulrich Wassmer,
professor of strategy, EMLYON Business School.
JOINING FORCES • MIT SLOAN MANAGEMENT REVIEW 31
ABOUT THE SUSTAINABILITY & INNOVATION PROJECT
MIT SMR’s Sustainability & Innovation project is an exploration, in partnership with BCG, of how
sustainability pressures are transforming the ways we all work, live, and compete. S&I’s research,
reporting, and community help managers to better understand the new forces that will affect their
organizations, to navigate through the overwhelming mass of information about sustainability, and
to fend off the threats and capitalize on the opportunities that sustainability issues present.
ABOUT MIT SLOAN MANAGEMENT REVIEW
MIT Sloan Management Review leads the discourse among academic researchers, business
executives, and other influential thought leaders about advances in management practice that are
transforming how people lead and innovate. MIT SMR disseminates new management research
and innovative ideas so that thoughtful executives can capitalize on the opportunities generated by
rapid organizational, technological, and societal change.
ABOUT THE BOSTON CONSULTING GROUP
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s
leading advisor on business strategy. We partner with clients in all sectors and regions to identify
their highest-value opportunities, address their most critical challenges, and transform their
businesses. Our customized approach combines deep insight into the dynamics of companies and
markets with close collaboration at all levels of the client organization. This ensures that our clients
achieve sustainable competitive advantage, build more capable organizations, and secure lasting
results. BCG is a private company with 81 offices in 45 countries. For more information, please
visit www.bcg.com.
ABOUT THE UN GLOBAL COMPACT
The UN Global Compact is a call to companies everywhere to voluntarily align their operations and
strategies with ten universally accepted principles in the areas of human rights, labour,
environment and anti-corruption, and to take action in support of UN goals and issues. Endorsed
by chief executives, the UN Global Compact is a leadership platform for the development,
implementation and disclosure of responsible corporate policies and practices. Launched in 2000,
it is the largest corporate sustainability initiative in the world — with over 12,000 signatories from
business and key stakeholder groups in 150 countries, and more than 80 Local Networks. For
more information, visit www.unglobalcompact.org.
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