Why does corporate sustainability take so long when almost all businesses agree it is necessary? That is the topic of Karen Landmark’s doctoral thesis.
"This is not just a matter of will or wisdom, the changes needed in trade and industry also require structural change", Landmark says.
She has investigated how businesses working together in clusters deal with sustainability and transition, and what business leaders think about sustainability and the need for action. On 15 February she defended her PhD thesis Enabling corporate sustainability transition: The case of the Norwegian process industry.
"My impression is that the traditional discourse on corporate responsibility is a bit simplistic. It needs to incorporate a wider perspective, in effect that sustainability is the result of other well-functioning systems. If we want to talk about a truly sustainable transition of trade and industry, we must look at new business models, new earnings opportunities and other areas that have to be completely excluded".
Much has been written about the ethical challenges multinational corporations face. Some produce their goods in countries where environmental regulations are weak, and health and safety measures neglected. As a result, focus has been on encouraging companies to take responsibility for their damaging practices. However, despite increased awareness, we keep seeing examples to the contrary.
"Changes in business practices will take time, and any corresponding economic gains will also take time. The way the economy is organised now, where businesses can make profits and not worry about environmental concerns, radical change in business practices is not likely".
The gap between knowledge and action is central to Landmark’s research, that is the reason she wanted to study the economic system in a broader perspective.
"We have to open up to discussions about policies and rethinking the economy. What regulations should we introduce, what incentives should we offer, can we continue to give oil and gas exploration subsidies while at the same time working for a shift in environmental policy towards greener alternatives? To put it crudely, what is the point of me sorting waste at home when the state dumps mining waste in the fiord?"
Landmark has studied the Eyde Cluster (the Norwegian Centre of Expertise for Sustainable Process Industry), and the Agder region to see what factors help and hinder a transition towards a sustainable industry. One finding is that leaders who interact in the cluster are more likely to implement sustainable measures in their businesses. This is among other things due to the dialogue established between them.
"Business leaders are knowledgeable about the global challenges facing us, and most agree something must be done. Other actors in business and industry also have a lot of knowledge, but it is not so easy for employees to see the larger picture and how things can be done differently to increase sustainability. It is quite natural that senior executives have a different perspective on this since they focus on business strategy."
In addition, Landmark discusses how the UN and Paris Agreement sustainability goals influence companies and their choice of business strategy, and how global trends, mindsets, and ideas about sustainability affect them regionally.
"We discovered that having a common long-term goal that challenges normal practices was viewed positively, and it gave the businesses a shared focus. The long-term perspective also made way for greater focus on environmental research and development. External pressure comes from global agreements like the Paris Agreement and the UN Sustainable Development Goals. This builds momentum for change and creates a sense of urgency", Landmark writes in her thesis.
"The shift we need for sustainable business is a long process, with few economic gains in the short term. Does this mean that only businesses that can afford losses have the opportunity to change?"
"Small and medium-sized enterprises often have fewer resources than large companies, but fortunately we live in a country where there are good tools to ensure environmental sustainability. The necessity of some years of zero profits is being discussed, since businesses must consider not to take out profits during the period of transition. The smartest businesses will find opportunities in a sustainable society and deliver goods and services to it. There are endless possibilities in a circular economy, but economic arguments may not be enough. Perhaps we will have to ask ourselves what the good life is and what is needed to create a good life for everyone."
Landmark hopes her research will provide new perspectives in the academic discourse, which is part of the process towards developing a sustainable society.
"It is important not to lose courage, but sustainable development cannot be privatised. If businesses know that the state will take some of the risks connected with the required changes, and if the state is clear about which markets to prioritise and what incentives businesses can expect, I think more businesses will do more. If this is simply a voluntary activity the development will be too slow and not effect change. If businesses can earn a profit the same way they always have, they will continue doing so until forced to do things differently."