Systematic Review - Network for Business Sustainability

The literature has traditionally distinguished between
eco-efficiency and eco-effectiveness, and these
concepts map well onto the first two categories we
propose. However, we prefer the labels Operational
Optimization and Organizational Transformation,
which acknowledge both the social and environmental
dimensions of sustainability.
In Operational Optimization, firms seek to diminish
the harmful consequences of their business activities.
For example, the focus on technological innovations
may reduce emissions generated during processing
or manufacturing, minimize the use of non-renewable
materials or replace toxic components with either
renewable or more benign alternatives.
At the other end of the SOI scale, Systems Building
recognizes that simply reducing elements of
unsustainability will continue to deplete resources,
degrade the environment and emit pollutants — only
less rapidly. For example, the global economy is
arguably locked into a “carbon model” that constrains
innovation into fossil fuel-dependency: incremental
changes in engine efficiency or manufacturing
processes, while laudable, will not lead to sustainability.
Systems Building describes, instead, a strategy of
seeking to become increasingly sustainable rather
than less unsustainable, in line with the ambition in
the Brundtland Report (WCED, 1987, paragraph 49),
to conduct business operations in ways that “meet
the needs and aspirations of the present without
compromising the ability to meet those of the future.”
Both types of innovation orientation are arguably
important. Still, reducing unsustainability, despite
delivering substantial improvements, is insufficient: its
gains are often offset by increased consumption or
production (Machiba, 2010). This mode of innovation
may be a stepping stone toward greater sustainability.
The leading edge of SOI, however, is characterized by
Systems Builders, firms experimenting with changes to
their business models, wider institutional change and
alternative delivery of products and services.
The shift between Operational Optimization and
Systems Building is complex, marked by a phase
of Organizational Transformation. During this phase,
firms shift from a focus on reducing harmful impacts
toward delivering social, environmental and economic
benefits both for themselves and the wider society.
During Organizational Transformation, firms’ innovation
activities become increasingly systemic, integrated
and socio-technical. On the basis of this analysis, it is
possible to further map the SOI landscape.
Dimension 1: Insular/Systemic: This dimension reflects
how the firm sees itself within a wider system. Does the
firm see itself as part of society or as standing apart
from society?
More progressive SOI firms look beyond their
boundaries to address the SOI challenge, paying
attention to wider systemic considerations. Their
innovation initiatives engage with and facilitate change
in wider systems. These efforts may include influencing
value chains or engaging with wider communities and
forming coalitions with stakeholders such as NGOs,
lobby groups and governments.
Innovating for Sustainability 18