LeadingasustainableenterpriseLeveraginginsightandinformationtoactIBMGlobalBusinessServicesIBMInstituteforBusinessValueCorporateSocialResponsibilityIBMInstituteforBusinessValueIBMGlobalBusinessServices,throughtheIBMInstituteforBusinessValue,developsfact-basedstrategicinsightsforseniorbusinessexecutivesaroundcriticalindustry-specificandcross-industryissues.Thisexecutivebriefisbasedonanin-depthstudybytheInstitute’sresearchteam.ItispartofanongoingcommitmentbyIBMGlobalBusinessServicestoprovideanalysisandviewpointsthathelpcompaniesrealizebusinessvalue.Youmaycontacttheauthorsorsendane-mailtoiibv@us.ibm.comformoreinformation.1Today,morethanever,organizationsarefocusedonenvironmentalandsocialresponsi-bilityasastrategicobjective.Our2009surveyof224businessleadersworldwideshowsthat60percentbelievecorporatesocialresponsi-bility(CSR)hasincreasedinimportanceoverthepastyear(seeFigure1).1Only6percentsayitisalowerpriority.TheseresponsesdefytheconventionalwisdomthattheneweconomicenvironmentdilutesCSRfocus.Theconditionsofafaster,flatterandmoreinterconnectedworldarewithoutquestionchangingbusinessstrategy,asisagreaterawarenessofsystemicriskanditsconse-quences.Thesesameconditionsmakeastrongcaseforasustainableapproachtodoingbusiness,onethatrecognizesthattheOrganizationshaverecentlysharpenedtheirfocusonsustainability,primarilyinresponsetoconsumerandstakeholderexpectations.Consequently,theyfaceanentirelynewsetofdecisions.However,mostlacktheinformationrequiredtomakethesestrategicchoices.Basedonwhatwe’velearnedfromoutperformingorganizationsandleadingCSRorganizations,webelievebusinessesshoulddevelopnewsourcesofoperational,supplychainandcustomerinformationtogainnewlevelsofinsightformeetingstrategicsustainabilityobjectives.LeadingasustainableenterpriseLeadingasustainableenterpriseLeveraginginsightandinformationtoactByEricRiddlebergerandJeffreyHittnerFIGURE1.ChangeinimportanceofCSRtostrategicobjectivesoverthepastyear.Source:IBMIntituteforBusinessValue2009CSRStudy.LessimportantRemainedaboutthesame60%Moreimportant34%6%(Percentresponses)2IBMGlobalBusinessServices2IBMGlobalBusinessServiceslong-termhealthofanorganizationisinextri-cablytiedtothewell-beingofsocietyandtheplanetonwhichwelive.Tobesustainable,businessesarenowembracingarelativelynewobjective:optimizingtheiroperationstominimizeenviron-mentalimpactandimprovesocialoutcomesinamannerthatalsomaximizesperformance.Morethantwo-thirdsoforganizationswesurveyedfocusonCSRaspartofaninte-gratedbusinessstrategytogrownewrevenuestreamsandcontrolcosts.Asaresult,theyfaceanentirelynewsetofdecisions.Cantheycutdownonwastewithoutincreasingthepriceofproducts?Dotheyneedtorethinkdistributionoptionstoreducecarbonandtheimpactofvolatileenergyprices?Shouldtheysegmentproductsandservicestomeetagrowingnumberofconsumersustainabilityconcerns?Theanswerstotheseandotherquestionsliketheminvolvemanaginganintricatenewsetoftradeoffs.Organizationsareconstantlyassessingthecurrentandfutureimpactoftheiractivities.They’reintroducinginnovativeprocessestosource,distribute,developandproducegoodsandservicesinasustainablemanner.Intakingonresponsibilityforwasteanddisposal,theyarechargedwithreevaluatingeverythingfromproductdevelopmenttopartnerships.Asmightbeexpected,progressismixed.Challengesabound,especiallyinaccessingtheinformationneededtomeetthesenewstrategicobjectives.Overall,organizationshaveintensifiedeffortstocollectinformationabouttheiroperationsinareasfromsustain-ableprocurementtoethicallaborstandards.However,manyarestillmissing–byawidemargin–theinformationtheyneedtooperateasasustainableenterprise.Outperformingorganizationshaveproventobefarbetteratcastingawidenetforinforma-tionacrosstheirecosystems.2Theyarealsocollectinginformationthatismorerelevanttounderstandingandmeetingtheperformancechallengesofoperatinginasustainablemanner.What’sholdingotherorganizationsback?Therearesomeveryrealobstacles.Asisthecasewithmanynewventures,itcanbedifficulttodeterminewhatinformationisneeded.Shouldorganizationsseekingtoimprovesustainabilitylookintothetsunamiofrealtime,unstructuredinformation?Iftheydo,willtheyknowhowtoturntheinformationintoinsightandaction?Whatinformationshouldtheyshareandrequestofothers?Andhowdotheymanageallofthesenewinformationneedsinacost-effectiveway?Earlyeffortssuggestthatcollaborationisthebestapproach.Insteadofgoingitalone,leadingorganizationsareexchanginginfor-mationwithcustomers,industrygroupsandnongovernmentalorganizations(NGOs)toincreasetheiraccesstoawiderpoolofknowledgeandtheirabilitytobenchmark.Theyarejoiningwithpartners,suppliersandevencompetitorstoexchangeleadingpracticesandultimatelybuildoutcommonstandardsforsustainability.StandardsarearequirementforeffectivelyimplementingaCSRstrategyoverthelongterm.Bycollaboratingandutilizingup-to-dateinformationandstandards,today’sorganiza-tionscanimprovesustainability,whilealsoincreasingoperationalefficiencyandperfor-mance.3LeadingasustainableenterpriseLeadingasustainableenterpriseLeveraginginsightandinformationtoactEmerginginformationrequirementsDemandsforinformationpertainingtoa