Read this article and pay attention to how companies achieve high-quality performance for value creation. Focus on the selection of KPIs and the discussion. How can organizations improve sustainability in their strategies to improve certain KPIs?
Discussion and Final Remarks
From the analysis adopted in this paper, several key concerns emerged with regard to a set of sustainability KPIs, the competitive advantages in applying a sustainable strategy, and the role of the SBSC framework to account for sustainability issues in strategy implementation.
In this
context, is necessary to stimulate companies to adopt sustainability in
their strategies. In fact, several studies have demonstrated how a
sustainable strategy can positively affect company performance,
underlining the advantages in terms of positive reputation and savings
due to the efficiency of the resources used. For example, Banyte
et al. stated that eco-compatibility helps companies recognize
customers' new environmental awareness and can provide a real
competitive advantage. The company's environmental awareness strengthens
the process of employees identifying with the company, increasing their
productivity and favoring the spread of a positive image. These
effects, in turn, increase efficiency and sales. Miles et al.
showed even more markedly the benefits of a good reputation by
considering the environmental dimension in the strategy. It has been
shown that companies can benefit from being willing to pay
attention to customers and a better working environment, and reducing
risk due to customer loyalty, which is reflected in better financial
performance. It has also been shown that banks are prepared to
grant loans with more favorable terms to "green" companies. Moreover,
embracing a green strategy also means reducing costs, and therefore has a
great impact on the economic performance of the company. In fact,
reducing plant emissions is achieved mainly through more careful and
efficient use of energy and/or using renewable energy sources. Both
strategies involve reduced production costs and therefore increased
profits. Furthermore, the green strategy also addresses product life
cycles. Through the paradigm 'use–recycle–reuse', companies can recycle
expensive materials and consequently save on the purchase of new ones.
Xerox, for example, uses used photocopiers as a source of components for
new machines through the asset recycle management (ARM) program, saving
hundreds of millions of dollars. This strategy is then publicized
in the environmental report that the company provides every year
together with the report for shareholders, as is done by many companies.
The role of public institutions is crucial in stimulating the
implementation of sustainable strategies. Many states influence
corporate strategies through various regulations. They may be
prohibitive or use incentives. In the first case, increasingly stringent
regulations help companies to avoid damage to their image, creating
limitations that, if respected, guarantee the good faith of the company.
Moreover, it can favor the birth of new businesses by creating new business opportunities. Incentive measures, on the other hand, contribute to solving the problem of high development and production costs or energy efficiency that companies must face once they decide to take the path of sustainability.
Moreover, based on the questionnaires, we identified several issues that impact the value creation process (section 3 of the questionnaire); in particular, the increasing value of brand image and reputation by adopting a sustainable strategy. In fact, sustainable strategies promote brand value growth by reinforcing the company's identity, which increases the confidence of consumers and, in general, all of its stakeholders. To be able to increase loyalty, the organization must integrate effective social marketing policies that can strengthen intangible resources and transmit emotional value with a high positive impact on perceived value, in order to request a premium price due to the attention paid to sustainability. A further advantage of implementing sustainability comes from the reduction of operating costs in the social and environmental spheres. On the one hand, the reduction comes from a greater commitment by the staff to the cause of sustainability, since they are motivated and recognize themselves in the culture of a sustainable business. On the other hand, there is a reduction in cost due to the increased efficiency coming from waste reduction and optimized use of resources such as water and energy. These firms are, in general, more careful about the use of materials and the labor force. In addition, companies that voluntarily adopt sustainable strategies normally base their entire policy on transparency and trust, and this induces stakeholders to have more trust in the company, so the relationship is more lasting and reliable. Voluntarily adopting a sustainable strategy and going beyond regulatory obligations brings a better awareness of risk management, because companies that integrate environmental and social practices carry out more checks and management analyses than those that do not implement these practices. Moreover, companies that pay attention to sustainability are characterized by increased sales as a direct consequence of increased brand value, since consumers show a preference for products with less environmental impact and that are characterized by real social commitment. Thus, integrating sustainability into corporate strategy is really profitable. Finally, managers agree on attributing a central role of benefits concerning financial resources. A socially and environmentally responsible company can benefit from a particular subsidized source of financing, so as to be able to reduce financial charges on its own capital and consequently increase the value of the company. Similarly, the advantage for investors is to achieve greater returns, given the lower risk associated with sustainable businesses, as well as greater durability in the medium and long term.
In
future research, it will be essential to test the model through a case
study, by implementing it in a real context. This will represent an
important step in increasing the implementation and diffusion of
sustainability culture in companies that include SDGs in their business
strategy. According to the European Commission (2019), sustainable
development will better people's livelihoods, but the future of our
planet requires immediate action. Therefore, the effort of each person
and each company will be essential. Strong action is requested
immediately, because if we continue in the same way, it will be too late
for our planet. To this end, the role of the SBSC is relevant in
driving companies in the "right" direction, considering value creation
while respecting natural resources, to help the transition of the
economy and society to a sustainable path.