Abstract
Corporations may talk a good game when it comes to environmental stewardship yet balk at projects that threaten the bottom line. Unpacking the "business case" framework with CES professionals reveals their limited agency to effect more than minor change.
In response to environmental degradation, for-profit corporations increasingly attest that they can and will become more sustainable, often proclaiming that “what’s good for the environment is good for business.” This framework is typically known as the “business case for environmental sustainability,” and its proponents assert that companies can increase profits by becoming more eco-friendly. To implement the necessary changes, companies employ corporate environmental sustainability (CES) professionals. We interviewed 51 of these CES professionals because we were curious to know: How is it going? Can CES professionals make the kinds of changes necessary to stem the worst effects of climate change and biodiversity loss? What opportunities and barriers do they face?
Often working alone or with very small teams, CES professionals collect data, develop projects, and work to achieve buy-in from division managers, corporate executives, and others. For instance, they may explore ways to reduce energy use and waste through energy saving projects like the installation of solar panels on company buildings or the electrification of delivery fleets. They pitch their proposals to company leaders and, if successful, may participate in overseeing implementation.
As environmental sociologists, we were skeptical of the notion of an easy fit between profit and environmentalism. For one thing, we were aware of the Jevons Paradox, which describes the tendency for new energy efficient products and processes to result in more consumption, thereby canceling out environmental gain. For example, when vehicles are made more fuel efficient, people tend to drive longer distances because it is cheaper. We were also aware of research on greenwashing that shows how corporate environmental sustainability can be deployed as a marketing tool that is largely unsubstantial in its impact.
Like most sociologists, we also think a lot about agency, which describes the extent to which individuals have the resources and power to make choices and take action, and structure, which refers in part to the “rules” of a society or group that shape or constrain the ways in which individuals are able to act. We argue that the business case for sustainability operates as a social structure that profoundly shapes what CES professionals can and cannot do in terms of integrating sustainability in their companies. The people we interviewed, and whose anonymity we protect with pseudonyms, repeatedly told us that the business case was central to their work. One of them, named Amy, explained: “We don’t do things if they won’t eventually pay themselves back. … [Y]ou know, [sustainability is] still not gonna supersede profitability.” The Chief Financial Officer at another company told a sustainability manager named Delilah: “the company is still driven by our financials” and, while environmental sustainability was a “nice-to-have… the financials are a must-have.”
Sociologist Charles Lemert offers a useful framework for understanding social structure: structures, he argues, create order, are extremely powerful, endure over time, and are mostly invisible. We can see that the business case for sustainability creates order, in that it operates as a largely unquestioned framework through which profits and environmental sustainability must be aligned. (Making a business case typically requires quantifying potential costs and benefits for any environmental initiative to show how savings can be realized and/or extra income can be generated.) The business case framework is powerful in that it sets the terms by which all environmental work must flow. Further, the business case for sustainability has endured over time, having existed now for decades. Lastly, because it is taken for granted, we can say it operates somewhat invisibly, especially as a structure that constrains action, certainly to those outside of the business world, but even to many CES professionals who take it for granted that their job is to reconcile profitability and environmentalism.
iStockPhoto // Tero Vesalainen
CES professionals have some leeway in making a business case when proposing specific environmentally sound projects, but their ability, their agency, to make lasting and meaningful environment-friendly interventions in company practices is often quite limited. To give a sense of how CES professionals are able to take actions that lead to intended outcomes in some instances and how, in others, they are blocked by the rules of the structure, we describe three types of projects: “low-hanging fruit” projects that are easy to justify financially; projects with slow returns on investment; and projects with indirect or uncertain financial benefits.
As environmental sociologists, we were skeptical of the notion of an easy fit between corporate profit and environmentalism.
low-hanging fruit
We found that the greatest ability to enact meaningful change happens at the beginning of a company’s decision to “go green.” When companies first engage in environmental sustainability, they can undertake a fair number of environmental projects that don’t have high upfront costs and that provide clear savings for the company. Examples of such “low-hanging fruit” might include reduced packaging, making the same product with less waste, or realizing savings from energy conservation.
It is not always clear, however, what happens once the low-hanging fruit has been picked. A few of the CES professionals in our study spoke to this lack of clarity. Samuel, who was the first to initiate sustainability initiatives at the industrial manufacturing company where he works, told us: “So far, the fruits are so low-hanging… what we do in energy management for the most part all has payback, what we do in recycling almost all has payback…. We’re about to build a new… building… and I’ve asked that we obtain two quotes, [one] for a net zero impact building and [one] for a traditional building as cheap as we can get it type thing…. So that will be interesting if there is a conflict or not.”
Kevin, a CES professional who worked in finance, felt that the business case needed to be broadened now that many companies had already saved money by instituting easy projects with clear-cut financial savings: “I think that low-hanging fruit is sort of gone at this point. So, what does the business case look like in 2022 versus 2012? Slightly different—or maybe more than slightly. Maybe it’s tremendously different.”
Despite this sentiment, it is not clear to us that CES professionals have enough agency to chart a different path for environmental projects when financial scenarios are more complicated. Our research revealed that the business case framework limits environmental action when projects don’t pay themselves back quickly and when the financial benefits take longer to realize or are not obvious.
timelines for return on investment
Having relatively short timelines for realizing a return on investment (ROI) was a source of frustration for many of those we interviewed. For example, retrofitting an older building incurs large upfront costs, and its ROI horizon might be several years longer than the two-year time frame companies usually require. Delilah explained: “One of the things I struggle with is the… ROI, the return on investment…. [T]he payback periods you see on some of these [environmental projects] are much longer than our company usually expects. So it’s kind of like every initiative is a big fight, because it’s like, ‘I want this to happen, it’s gonna have this impact on our metrics,’ and [my CEO], he’s like, ‘Yeah, but that’s a seven-year payback, we’re not investing in something like that,’ or ‘No, that involves a 20-year contract, we’re not doing that.’ So it’s hard to work within the existing parameters for projects that are very different from anything else they’ve done. So [the CEO] wants to make good change, but he doesn’t want to change the policies that would enable that to happen more easily.” The business case framework limits environmental action when projects don’t pay themselves back quickly.
Other CES professionals likewise told us that they had difficulty convincing corporate leadership to greenlight projects for which the ROI was longer than two or three years. This was especially true for large projects, such as implementing new renewable energy infrastructure. Roy, a sustainability manager at a technology company, told us that, “[a]t the end of the day, you know, there has to be some business case behind it. …[L]ike, when we’re looking at these solar panels, and… we have a lot of warehouses around the world—big, big footprints, a lot of real estate. So, we thought, ‘Seems pretty easy, let’s just slap some solar panels on the roof,’ you know? …And then we looked into it more and more, and it’s just—the payoff for that was much longer-term than we thought it would be.”
iStockPhoto // SeventyFour
Corporate environmental sustainability professionals collect data, develop projects, and work to achieve buy-in for environmental efforts.
Though many of the CES professionals we interviewed identified this timeline constraint, a few companies apparently have “workarounds” for this dilemma, as Bernard, a sustainability manager at a manufacturing company, shared: “[S]ome companies, you know, actually establish a different type of hurdle rate for sustainability related projects. So that’s one way of addressing it. You know, another way that I’ve seen corporations address it is they have a pot of money and for those projects that don’t meet the two-year payback period, then the division will sort of, like, split the cost of the project. You would get half of the money from this bucket, you know, of sustainability funds. So, you know, [ROI] is sometimes a challenge when you’re looking at sustainability focused projects.”
uncertain or indirect financial benefits
The two types of projects discussed above, low-hanging fruit projects and clearly beneficial projects with longer-term ROIs, are concrete and quantifiable. While not without their challenges, they fit neatly—though not always comfortably—into the business case. But making a business case for potential, though not guaranteed, positive financial outcomes brings the inherent tension between profitability and environmentalism into high relief. For example, consumers might be willing to spend more on an environmentally sustainable product, a new environmentally sustainable practice might improve the company’s image, or an environmentally unsound practice might pose a future financial risk. Kate, director of sustainability at a manufacturing firm, explained: “[T]hat profit element can come in terms of fines that you’re paying. It can also come in terms of business that you’re losing. It can come in terms of employee turnover—that also costs money—and it can come from a damaged brand.”
iStockPhoto // boggy22
Environmental proposals involving potential, though not guaranteed, benefits to the company bring the inherent tension between profitability and environmentalism into high relief. The agency of CES professionals to effect these changes is particularly dependent on their ability to construct a persuasive narrative.
In the case of indirect or uncertain benefits to the company, the agency of CES professionals to effect environmental change tends to be more limited, as it is more dependent on their ability to construct a persuasive narrative. We saw this in comments from Cammy, sustainability program manager at a healthcare company: “[T]hings get a little harder to quantify in terms of, ‘We need to do this to decrease the likelihood of legal interventions,’ or, ‘We need to do this to meet the expectations of our stakeholders’—where you can’t actually put a hard number on that. But our objective is still to benefit the business and have a positive business outcome….”
communication and creative framing
Given the constraints of the business case structure, communication becomes a major vehicle for exercising agency. The CES professionals in our study repeatedly told us that a well-crafted narrative enhanced the likelihood of convincing corporate leadership and various team members not only of the financial viability of a given project, but also of the importance of environmental sustainability more generally. Communication and creative framing are thus key CES skills. Maya, a sustainability manager at a clothing company, explained, “Finding the way through, even if it—I mean, usually it is good for business, but in some cases, maybe it doesn’t look that way at the moment; we know it will be long-term, it’s really just figuring out how to communicate that to everyone else.”
To best communicate to “everyone else,” CES professionals must construct a robust business case in the form of convincing arguments, proposals, and predictions, as Ronald, who works at an energy company, attests: “A lot of my job, I feel, is influencing. So, taking global megatrends and saying, ‘Right, this is important to us as a business. This is how it will impact our business; but also, on the flip side, what we can do to help contribute to society and to the environment’….”
Grace, a CES professional at a consulting company, described her work similarly: “[This] is a position of diplomacy. …You can only get people to do things for the most part by diplomacy, through cajoling, through finding their interests. Now, some companies do have the executives who will have their performance, their pay, tied to it, [but] that’s still not ubiquitous….” In fact, only one of our respondents told us their company had adopted the practice of partially tying executive pay to performance on environmental sustainability; the policy was too new for them to report how well it was working.
Diplomacy is so crucial that a number of CES professionals told us they sought out communication strategies from other sustainability professionals at conferences and networking events. Neil, a sustainability director at a transportation company, relayed: “So, when you want to deploy policies or programs in an organization, you have to get buy-in. And there’s no simple mathematical calculation of how you do that, because you have to deal with different personalities, different parts of the business, different types of business, different sectors. …[S]o, you’re talking to other sustainability individuals—a huge driver for these interactions is finding people that have succeeded in accomplishing some goal or strategy that you’re trying to do in your own organization. So, getting that insight… and then having that as a toolset as you go in is integral to success, I think.”
blocked agency
Though the CES professionals we interviewed repeatedly told us about the importance of creative framing and strategic communication, we heard a lot of stories of failed attempts at convincing colleagues and leadership to greenlight projects. All too often, their business case narratives about how proposed initiatives would be “win-wins” led to dead ends.
Such was the case for Joann, a CES professional at a clothing firm, who tried to convince company leaders that removing plastic labeling on clothing sold in stores was both a cost-saving and a sustainability measure. Joann expressed frustration, especially in light of her team’s efforts: “[W]e try our best to communicate, like, ‘You’ll have financial savings… this is the weight you could be reducing, and we’ll bring everyone closer to their goals.’ And at the end of the day, it comes down to one vice president… who gets to say ‘no,’ and it kills an entire project that you’ve been working on for months. So it is quite frustrating that people in power, if they don’t already have that bent towards sustainability, have such an easy way to just shut everything down….”
iStockPhoto // robertsrob
Making a business case typically requires quantifying potential costs and benefits for any environmental initiative to show how savings can be realized and/or extra income can be generated.
CES professionals often told us they felt constrained by business case rules, and some believed that it prevented fundamental environmental changes from being made at all. Nick, who worked at a large natural foods company, summarized: “[A]fter having worked on this for years, I don’t fully believe in the simplicity of the triple bottom line.... [A]t times, doing what’s right for efficiency and creating a more climate friendly business is just not going to return profit in a time frame that aligns with financial reporting.”
the business case chokehold
Corporate elites may care deeply about environmental sustainability. We know that some of their employees do. So why can’t they get past the business case that so profoundly limits environmental action? Our answer is that corporate leaders also operate within a structure that has its own rules, and these rules are designed to maximize financial gain. The environment is not a fundamental priority. As Roy put it, “...ultimately, the purpose of a public company, at least as the laws are currently written, is to drive value for shareholders. And while there is, of course, some value [laughs] in keeping the world running and not destroying everything, the way it’s mostly read and seen by investors—as the return on investment in terms of dollars—that is always going to be, unless there’s a seismic change, very important.”
This question of purpose goes to the heart of the challenge of integrating environmental sustainability in the corporate sphere. Whether a company is privately owned or publicly traded, investors usually want robust returns on their investments. Robust returns derive from profit, which, as we have shown, does not easily align with environmental sustainability. Instead, as critical researchers have demonstrated, profit most often entails the extraction and/or use of natural resources, the creation of waste, and the externalization of costs onto workers, communities, and the environment.
By and large, the CES professionals we interviewed seemed to believe in the viability of the win-win framework that claims that what’s good for the environment is good for business, and they tried their best to navigate the contradictions inherent in the business case. We found, however, that the rigidity of the business-case structure severely limits the agency of CES professionals, who are eager to implement meaningful environmental changes in the corporate sphere. Maya reflected: “Things are slow-moving. It takes so many approvals; you have to make the business case rock solid before it’ll even be taken to the next level for approval. So, I think there’s definitely that slowing us down….”
For CES professionals to be able to fully act on the promise of corporate environmental sustainability, the business case structure needs to change. Kevin told us, “You know, there are many people out there who would say, ‘You know, you’ve got to throw [out] the business case—the whole concept of talking sustainability in the language of business.’ Like, ‘We’re way past that, right? …[W]e can’t afford to be trying to make the case financially for every single change or new policy or something because, you know, look around you. You’re not going to have a community to be in anymore.’ …I mean, it’s just these existential crises that are occurring are much more significant than that sort of near-termish look in terms of dollars or profits. So, it’s a huge conflict.” He continued, “It probably has gotten slightly better, where some decisions are being made where maybe the risk is unclear, maybe the business rationale isn’t super clear. But companies are gonna sort of make that decision anyway…. [T]o summarize, I think we’re a long… way off with this.”
As it is currently configured, CES allows companies to continue to earn profits and satisfy investors. The professionals with whom we spoke saw their task as finding ways for companies to do this in a more environmentally sustainable way. As we have shown, this can definitely happen in the case of low-hanging fruit. But as Kevin’s quote indicates, some CES professionals are beginning to question the contradictions and limitations to what is possible, given the business case imperative.
Clearly, there has been some movement toward corporate environmental sustainability in the past decade. Companies now routinely produce annual sustainability reports and create benchmarks for reducing their energy, water, and waste footprints. Some large investors encourage firms to transition to renewable energy and account for their carbon emissions. The fact that companies are hiring more sustainability professionals is a heartening development. But the changes are scattered, uneven, and, given the urgency of climate change and biodiversity loss, staggeringly inadequate. The requirement that any environmental project must also result in profit is a major hurdle on the path toward environmental sustainability.
Like a number of other critical sociologists, we doubt that the corporate sector can voluntarily shed the long-standing business case framework (itself part of a larger set of structural forces) on its own. Significant and thoughtful government interventions will be required to compel the necessary transformation of corporate structure and practice needed to address environmental crises.
iStockPhoto // lamontak590623
The requirement that any environmental project must also result in profit is a major hurdle on the path toward environmental sustainability.
recommended resources
Michael L. Barnett, Benjamin Cashore, Irene Henriques, Bryan W. Husted, Rajat Panwar, and Jonatan Pinkse. 2021. “Reorient the Business Case for Corporate Sustainability,” Stanford Social Innovation Review, Summer. Written by business and management professors, this brief article argues that the business case paradigm needs to change in order for companies to be more effective in their sustainability efforts and offers three specific steps to reform.
Leslie King and Vanessa Adel. 2024. “Navigating Environmental Sustainability in the Corporate Sector,” Journal of Environmental Sciences and Studies. We describe specific tensions between profit, growth, and sustainability and show how these tensions derive from the social and legal structures that shape the decisions and actions of for-profit corporations and those working in them.
Fred Magdoff and John Bellamy Foster. 2011. What Every Environmentalist Needs To Know about Capitalism. New York City: Monthly Review Press. This book is an excellent primer on how capitalism and the growth imperative produce environmental crises.
Daniel Nyberg and Christopher Wright. 2013. “Corporate Corruption of the Environment: Sustainability as a Process of Compromise,” British Journal of Sociology 64(3). Sociologists Nyberg and Wright explain how the regular compromises inherent to efforts to align profit and environmental sustainability ultimately result in companies prioritizing the market over the environment.
Benjamin Sovacool. 2010. “Broken by Design: The Corporation as a Failed Technology,” Science, Technology and Society 15(1). This article argues that the corporation is a type of technology and is designed to extract profit and grow at the expense of society and the environment.