1.2 Introduction

The sustainability story of the past quarter century is powerful. Sustainability emerged in the 1990s as the “right thing to do.” Given the earth’s finite resources and growing population, no one could argue against the Brundtland Commission’s 1987 definition of sustainable economic development as …

Grounded in such compelling logic, the sustainability view caught on as the triple bottom line (TBL). The TBL argued managers should take a more holistic approach to decision-making and focus on three Ps—People, Planet, and Profit (see Figure 1.1). Simply put, financial performance is critical, but it isn’t everything! You may want to think of the TBL in this way:

1. People. You should manage your company in a way that improves people’s lives. This is the social aspect of the triple bottom line.

2. Planet. You should manage your company in a way that is environmentally responsible—that is, improves the well-being of the planet.

3. Profit. You need to manage your company to make money. If you are not economically viable, you cannot contribute to improving the TBL’s people and planet dimensions.

Throughout the 1990s and early 2000s, momentum for sustainable decision-making grew. Companies embraced ecological and social performance, touting their efforts to key stakeholders. In the consumer space, a new demographic—LOHAS (lifestyle of health and sustainability)—emerged. By 2005, Walmart’s CEO, Lee Scott, tilted the sustainability playing field, proclaiming,

1. To be supplied 100 percent by renewable energy.

2. To create zero waste.

3. To sell products that sustain our resources and environment.

Notably, Scott’s three-pronged strategy reveals sustainability as a supply chain (SC) phenomenon. Obtaining real results in renewable energy, zero waste, and sustainable-products requires innovative SC collaboration. We’ll talk more about this in a moment.

Almost 20 years later, despite Lee Scott’s endorsement, the sustainability movement continues to struggle to become mainstream business practice. Why, you ask? Although the acronyms have evolved—from TBL to CSR (corporate social responsibility) to ESG (environment, social, and governance)—making the business case for sustainability remains a challenge. Chris Librie, Hewlett Packard’s director of environmental initiatives, explained, “It’s very difficult to motivate individual consumers around sustainability … It’s a nice-to-have, but they’re generally not going to pay more for it.”

The reality is that consumers often won’t pay more for sustainable practices. And companies, and their shareholders, are reluctant to settle for skinnier margins. Your takeaway: Sustainability is only sustainable if it is profitable—for everyone! That’s why managers need to think differently about the way their companies do business. Providing you the tools to think, and act, differently is the focus of this book. Our goal: Help you build a toolkit to deliver economically viable sustainable outcomes.

To understand the sustainability challenge and position yourself to develop and promote a winning sustainability strategy, you need to grasp two decision-making drivers.

1. Priorities

2. Motivations

But before we look at how priorities and motivations influence sustainable decision-making, we need to briefly review SCM’s central role in the quest for a sustainable future.