Best Practices of Environmental Front-Runners: A study investigating how and why enterprises have established an environmental leadership position

Abstract

Sustainability and the environmental impact of organizations have received significantly increasing attention over the last decades. The transition towards more sustainability focused business models impacts all companies but also creates opportunities to strengthen the competitiveness and the brand image by being superior in terms of sustainability performance. Sustainability, and especially environmental sustainability, has been a major focus area for academics for a long time. However, limited attention has been given on the variations between industries in terms of what factors that impacts the value creation from sustainability and the underlying rationales for being an environmental front-runner.

Therefore, the purpose of this report was to investigate industry-specific best practices for how large, environmentally leading firms have established their position as environmental front-runners. By doing so, the objective was to identify how the industries differ and what industry-specific factors that are leading to the potential differences. The purpose of the report was fulfilled by a multiple-case study where several environmentally leading companies from the automotive and life science industry were investigated. The result of the study shows that the objective for companies from both industries is to establish a competitive advantage from their environmental focus. However, the companies from the automotive industry are to a higher extent seeking financial advantages when establishing themselves as environmental front-runners. On the other hand, companies in the life science industry are to a higher extent driven by a desire to do good for the society in combination with building company resilience and attracting employees as well as business partners, and do not see the same financial benefits. It is seen that the financial performance is of great importance in the life science industry as well but compared to the automotive industry the higher purpose of the business was concluded to be a more important driver in the reasoning behind positioning the company as an environmental front-runner.

Moreover, the study shows that the way companies work with sustainability is similar between the two industries. It is concluded that the interviewed environmental front-runners have started off by focusing on integrating sustainability in the core strategy. To further improve the sustainability maturity, the focus has been to integrate sustainability into the whole company. Finally, to achieve the highest level of sustainability maturity, companies has targeted to extend the sustainability focus to also include the surrounding ecosystem and thereby focus on the value created for the whole society and not only the individual company.