Building a Sustainable Business: Lessons from Online MBA Programs

Building a sustainable business has become increasingly important in today’s world. With climate change, globalization, technological disruption, and changing consumer preferences, companies need to incorporate sustainability across operations to future-proof themselves. Online MBA programs provide great insights into how businesses can embed sustainability while pursuing profits. This article synthesizes key lessons from leading online MBAs on how companies can build sustainable and resilient business models.

Defining Business Sustainability

Business sustainability refers to business practices that meet current needs without compromising the needs of future generations. It means creating long-term stakeholder value by adopting business strategies and activities that have positive economic, social, and environmental impacts. According to researchers, truly sustainable companies have six key characteristics: a worthy purpose focused on creating value for society, good governance principles, ethical practices, stakeholder orientation, resource efficiency, and system perspective. Online MBAs emphasize that sustainability should be integral to core business strategy instead of being treated as an ad hoc add-on.

Lesson 1: Develop a Sustainability-Oriented Vision and Purpose

Leading online MBAs highlight that a sustainability vision and purpose should serve as the foundation for strategy formulation. Companies need to define how they will create value for key stakeholders like customers, employees, investors, and communities while operating responsibly and addressing societal challenges. For example, Seventh Generation, a green consumer goods company, is guided by its vision to “bring environmentally safe and responsible products into every home”. Its business model is focused on developing plant-based, non-toxic household products while reducing its environmental footprint across operations. Developing a higher sustainability purpose expands the horizons of strategic thinking in organizations.

Lesson 2: Set Ambitious Sustainability Goals

In addition to defining a sustainability vision, companies need to set specific, ambitious, and measurable goals across economic, social, and environmental parameters. Online MBAs suggest setting science-based targets, having a dedicated sustainability budget, and linking executive compensation to sustainability KPIs. For example, Starbucks aimed to cut its environmental footprint by 50% and have 10,000 eco-friendly stores by 2025. The scope included targets like carbon emissions reduction, renewable energy usage, waste diversion, and water conservation. Setting such time-bound sustainability goals catalyzes innovation across all business functions to identify pathways for executing the vision.

Lesson 3: Embed Sustainability Across Business Functions

For successful execution, online MBAs emphasize that sustainability should be integrated across all organizational functions rather than siloed in a distinct CSR division. From product design and supply chains to marketing, HR management, and procurement, sustainability principles need to be ingrained everywhere. Manufacturing firms can adopt a “circular economy” approach to product design by using renewable materials and enabling recycling. Marketing can drive messaging and engagement around sustainability mission. HR can align talent strategy and corporate culture to sustainability vision. Embedding sustainability throughout breaks down narrow business case notions and builds new capabilities.

Lesson 4: Leverage Technology and Analytics

With digitization accelerating across industries, online MBAs discuss how technology and analytics are pivotal for driving sustainability. Data analytics help measure carbon footprint, streamline operations, optimize routes, prevent leakage, and track other ecological impacts. Technologies like IoT sensors, blockchain, AI/ML, renewable energy tech, and industrial biotech can transform unsustainable practices. For example, apparel firms like Levi’s are piloting waterless fabric finishes powered by sustainable chemistry and machine learning. Spanish renewable energy giant Iberdrola uses smart grids, big data, and automation to monitor energy usage patterns and improve efficiency. Technology and sustainability are converging as symbiotic catalysts for each other.

Lesson 5: Collaborate Through Open Innovation Networks

Online MBAs also discuss extensively how networks and collective action enable companies to accelerate their sustainability initiatives. Since ecological issues are complex and no single firm can address them alone, cross-industry partnerships are vital for innovation and progress. Collaborative networks allow leveraging of shared resources and capabilities while mitigating individual risks. For example, companies part of the Renewable Energy Buyers Alliance in the US work together to procure renewable energy at scale. Similarly, the Sustainable Apparel Coalition, with over 250 corporate members, collaborates on supply chain mapping, materials sustainability, and circularity to reduce fashion industry’s emissions. Such collaborative networks will reshape entire industry value chains.

Conclusion

Building sustainable businesses requires fundamentally reimagining corporate purpose, strategy, and organizational configuration. Online MBA programs offer crucial lessons for firms on how to bake sustainability into their management DNA rather than treat it as an afterthought. As the global economy experiences increased disruptions in coming decades, adopting long-term sustainability principles will be key for future-proofing companies across sectors. Beyond risk mitigation, sustainability can provide strategic advantage and value creation opportunities for first movers. The systemic transformations needed, however, require collective action between businesses, governments, investors, and civil society members.