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The Challenge of Sustainability

Question: What are some of the biggest sustainability challenges confronting businesses?

Jay Light: Today you have to worry about multiple dimensions of sustainability.  It’s energy.  It’s water.  It’s natural resources of all kinds.  It’s also in a world of change of all kinds how you build a sustainable organization that can perpetuate itself across time, so that is something we didn’t used to talk about very much.

On the one hand it has really broadened the sense of what costs one should take into account as one thinks about everything your firm does, so there are the direct costs that people have always taken into account, the labor costs, the direct energy costs, the cost of the buildings, et cetera, but what has become more clear is there are a set of external costs that the firm doesn’t necessarily directly bear, at least not in the short run that firms… pollution being the more obvious one and while that is not a direct cost to the firm in the short run it’s obviously a cost that we all bear and so the question is how do you build a system and how should a firm behave with regard to these external costs.  How do you make them part of if you will, the set of objectives that you are trying to take into account as you think in this broader way about costs?  And then there is also the issue of flexibility.  As the world changes, as different natural resources become more constrained firms have to develop much more flexible sense of how are they going to get things done in the future.  For example, an agribusiness firm, if… how is it going to get things done in a drought?  How would one get things done in an energy crisis?  How would one reinvent a company to in fact adapt to whatever obscurities are likely to present themselves next year, the year after, 10 years from now, 20 years from now, so both cost and flexibility I think are the 2 dimensions along which sustainability would suggest a different set of answers that one might have come to 10 or 20 years ago.

Companies today need to think about sustainability across a variety of dimensions, says Light: "It’s water. It’s natural resources of all kinds. It’s also in a world of change of all kinds how you build a sustainable organization that can perpetuate itself across time."

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