Sustainability Leadership towards Strategic Sustainability. Examining Brazilian Organisations

Table of Contents:

Acknowledgment

Abstract

CHAPTER 1: This project
1.1 Introduction
1.2 Aimandobjectives
1.3 Research Question
1.4 Significance and inspiration

CHAPTER 2: Literature Review
2.1 Part A Strategic Sustainability
2.1.1 Evolution and motivations
2.1.2 Causes of inefficiency
2.1.3 Transitional and transformational
2.1.4 Sustainability Value Framework
2.1.5 SVF through transformational approaches
2.1.6 Evaluation of SVF’s
2.1.7 Corporate sustainability in Brazil
2.2.4 Part A summary
2.2 Part B Sustainability leadership
2.2.1 New ways to lead are required
2.2.2 Definition of sustainability leadership
2.2.3 Streams of sustainability leadership
2.2.3.1 Behaviour orientated leadership
2.2.3.2 Technical-instrumental or task oriented
2.2.3 Trends in sustainability leadership
2.2.4 Part B summary
2.2.5 Gaps in the literature 40

CHAPTER 3: Methodology
3.1 Chapter introduction 41
3.2 Overview of research methodology
3.3 Samples
3.4 Data Collection process
3.4.1 Interviews
3.4.2 Case study method
3.5 Data analysis
3.6 Chapter summary

CHAPTER 4: Findings
4.1 Chapter introduction
4.2 Case studies presentation
4.2.1 Duratex SA
4.2.2 Votorantim Metals
4.2.3 AES Brasil (Eletropaulo)
4.2.4 Tetra Pak
4.3 Data analysis process
4.4 Summary of key findings
4.6 Chapter summary

CHAPTER 5: Discussion
5.1 Chapter introduction
5.2 Discussion of the drivers and supporting findings
5.2.1 Strategic sustainability
5.3 Implications of this study
5.4 Limitations of this study
5.5 Recommendations for further research
4.6 Recommendation for the organisations

Conclusion

References

Appendices

Appendix (A) Denominations of sustainability Leadership

Appendix (B) Coded quotes from sustainability managers

List of figures

1 Sustainability Value Framework

2 The Buzzword Sort

3 Sustainability critical issues

4 The Seven Action Logics

5 LDF applied to sustainability

6 Relationship between mindsets and the five Gears

7 CPSL model of leadership

8 Analysis process

9 Summary of key findings

10 Sustainability Leadership Framework

List of tables

1 Elements categorized into two major topics

2 Conceptualization of elements.

Acknowledgments

This project culminates with the completion a significant journey of my masters at Aston University in the UK. More than an examination of topics, this project has tested my knowledge about sustainability acquired so far, and also inspires my next steps in this field. From the point in which I took my decision to return to the classrooms in Luanda, I would like to thank special friends, Cyla Weihsmann, Dr. José Octávio Van-Dúnem and Dr. Cláudio Cardoso and for their warm motivation. This project effectively counted on the support of my supervisor Josie Kelly for her meticulous inputs towards high academic standards, she incentivised me to achieve with this project. I also want to thank to Dr. Chinny Nzekwe-Excel for her precious support during my learning process in each step of this project.

This topic was successfully accomplished thanks to Ricardo Voltolini, and his robust and pioneering work about sustainability leadership in Brazil, and for the valuable resources that he made available to me. In the view of this, I also express my special thanks for the Brazilian organisations that voluntarily participated: Duratex, Votorantim, AES Brasil and Tetra Pak. A sustainability representative from each organisation took part in this project. These four knowledgeable professionals, which for ethical reasons I will keep in anonymity, cooperated enormously with their time, informing me about technical information as well as subjective impressions which were crucial for this project contextualization.

I thank all my course colleagues for their input, continuous cooperation in person and our digital conferences. I also wish to thank all my dear friends for their emotional support when I needed it the most.

Lastly and from my core and spirit I thank God and to Saint Anthony, my guardian, for illuminating me everyday during my path. I thank my mum, Joana Angélica for her example of strength and persistency and to my father, Evandro Ayres, (in memorian), my beloved environmentalist, for his eternal inspiration that I will use to pursue a better society.

Abstract

This study examines how sustainability leadership drives strategic sustainability by using four large Brazilian organisations as a sample to analyse how this relationship happens, and the implications of it. The results show that there is a positive influence from this leadership towards corporate sustainability strategies when three main factors are in place: (1) Support of top leadership through its projection of vision, motivation and risk-taking in a innovative way; (2) Skilled leaders which are highly knowledgeable about their business and sustainability as well being able to possess emotional competence; (3) Leadership with a system thinking approach, comprising a holistic vision and co-participation of different actors. The main implication of this study is that developing the leadership in the mentioned factors would lead to improvement of these organisations’ sustainability practices, and possibly towards more transformational ones. Therefore, it is suggested that leadership programmes work to develop the elements found in the model proposed systematically. Eventually, this model and these recommendations can be adapted to the realities of other organisations that resonate with the characteristics found in the sample.

Key words: sustainability leadership, strategic sustainability, leadership development, action-logics, transitional sustainability, transformational sustainability, Brazil, sustainable development.

CHAPTER 1: This project

1.1 Introduction

Our society is currently living in an inversion of patterns of scarcity when compared to the Industrial Revolution two centuries ago. During that period, there was a shortage of people’s capabilities to deal with the machines and a profuse source of natural recourses available. By contrast, today the workforce has been replaced by modern systems and the natural capital is in deep deficiency and shows the boundaries of economical growth related to Earth’s carrying capacity (Hawken, Lovins, and Lovins, 1999). Practically, society has been not only postponing to tackle this problem effectively, but has also been depleting resources rapidly. Both facts associated have been stressing the resilience ability of ecosystems and decreasing species, exterminating habitats and damaging the health of human beings as a result of the sick planet we are living in (Hawken, 1995).

Korten (2001) argues that private organisations are directly part of the problem and have become the most powerful institutions worldwide. Therefore, organisations should be part of the solution, using their power to turn damaging corporate systems into reconstructive ones, enabling natural resilience and meeting the needs of society. Indeed, there is a stream of cutting edge organisations with authentic commitment in changing the current paradigm, but the problem is that the amount of actions is not enough related to the challenges that the planet is currently facing. Clean technologies, for example, have been more frequently used to cooperate with nature’s resilience capacity. Nevertheless, the amount of development owned by organisations is still disproportional when compared to the effects of an unsustainable world: exponential population growth, scarcity and extinction of natural resources, loss of biodiversity habitats destruction and extreme poverty (Stahel, 2007).

Despite many other drivers, such as market and governmental incentives, human psychology and absence of sustainability vision, lack of participatory corporate leadership is one of the factors which seriously accentuates these symptoms. (Borland and Paliwoda, 2011). In fact, the way that leaders use their power to make transformations happen is crucial and is in the core of the debates today (Korten, 2001). Presence of leadership orientated to sustainability may explain why some companies are able to understand the sustainability challenges as opportunities to develop internal capabilities and generate advantages for their businesses, for society and for the environment while others are not able (Doppelt, 2010). Hence, the answer for some organisations to foster corporate sustainability or sustainability embedded into business strategies often starts when the leadership is convinced and committed to implement it (Ferdig, 2007; Borland, 2009).

For those leaders who understand that fostering sustainability is a paramount condition for all species survival, but are not convinced that they are the generation to play the role, the issue reveals a permanent defect in mind-set change and lack of participatory leadership (Starkey and Welford, 2001). Consequently, if strategic sustainability represents a gear in which organisations can operate to generate business profitability without leaving behind wellbeing in a long-term perspective by restoring the environment and improving human conditions (Bennett and James, 1998; Borland, 2009), leadership orientated to sustainability or sustainability leadership is therefore a fuel to move this gear, with fundamental roles. These roles encompass support towards other leaders to act upon their corporations, shift mindsets and consumer patterns and partner with governmental structures and other relevant stakeholders in order to focus on common environmental and societal goals (Ferdig, 2007).

1.2 Aim and objectives

The predominant aim of this project has been to better understand how sustainability leadership drives strategic sustainability, by identifying and interpreting factors that can be observed through this relationship. This purpose unfolds into the observation of sustainability strategies performed in four Brazilian organisations, and the characteristics of sustainability leadership that is in place in this given environment. This explorative and interpretative study has been focused on the way this leadership has been shaping these organisations and moving beyond its borders of strategic sustainability practices.

In complement to this aim, the project has three objectives:

- To explore strategic sustainability and sustainability leadership concepts and distinct approaches
- To analyse case studies from the perspective of both aforementioned topics
- To draw conclusions and produce recommendations to further studies

This project considers two assumptions confirmed through data collection:

1- The sample performs strategic sustainability as part of its corporate orientation, being reflected into its vision, mission and daily practices.
2- The leadership orientated to sustainability performed in all four organisations has been contextualized in this study as sustainability leadership.

1.3 Research Question

How does sustainability leadership drive strategic sustainability?

This is the main question that this project wants to answer in order to reveal and improve understanding of what factors are connected to sustainability leadership and how they lead to strategic sustainability. This question unfolds into a secondary question: which sort of sustainability leadership has been used to address strategic sustainability?

1.4 Significance and inspiration

Despite an abundance of natural resources and biodiversity, Brazil has been dramatically loosing these resources over the last 30 years. Together with this fact, social inequalities are still a major problem in the country that primarily leads to a chronic economic inefficiency and a lack of wellbeing. This scenario requires, therefore, strong corporate policies in place that are associated to public ones to ensure people’s basic needs are met: education, health, safety, decent income as well as nature’s preservation in a long-term view (Barata, 2007). Positively, with a gradual access to products and services for the low middle class and those considered as in the poverty line in the last decade, the corporate’s mission to assume a responsible posture and help to meet the needs of almost 108 million people, or 54% of the population, proportionally increases. Therefore, this new corporate posture concretized in sustainability strategies has a great challenge in Brazil to learn from an empirical process and succeed (Eight, 2014). Currently, there is a wave of sustainability leaders changing their organisations through these strategies and influencing other organisations to follow the same path (Voltolini, 2011). The inspiration of this project derives from this significant movement where Brazilian corporations are involved, creating and sharing strong business cases and therefore impacting society. Its significance arises from the novelty of the topics discussed in this study and the effects it could have for the academic literature and also for other organisations, as per increasing awareness about these topics in this particular context and motivating positive corporate decision making-processes.

CHAPTER 2: Literature Review

Chapter introduction

This chapter addresses the understanding of two major topics of this dissertation: strategic sustainability and sustainability leadership. Shared into two parts, this literature review will examine in depth the concepts and approaches of both topics, discussing its limitations and directing the focus to comprehend the relationship between these topics in order to create a theoretical background to respond the research questions.

2.1 PART A – Strategic sustainability

This section describes the evolution of strategic sustainability, reveals the causes of its inefficiency and underlines the difference between transitional to transformational sustainability. Later, this section analyses the Sustainability Value Framework from the view of new sustainability approaches and observes the development towards strategic sustainability within a Brazilian context.

2.1.1 Evolution and motivations

The origins of Strategic sustainability can be found in the expression Sustainable Development from The Brundtland Report (Galpin and Whittington, 2012). This term refers to sustainable development as the ability of humans to satisfy their needs without inhibiting the ability of other humans (WCED, 1987). At the time it was launched, this document represented a call for action, finally embracing corporations to participate together with the public and non-profit sector by setting strategic goals to maintain food security, water supply, natural resources and biodiversity preservation, as well as tackling over population, pollution control, climate change among other challenges within its operations (Hawken, Lovins, and Lovins, 1999).

Today, strategic sustainability has different but converging definitions among scholars. Its meaning tackles issues without dissociating from profitability (Galpin and Whittington, 2012). For Stead and Stead (2010) Strategic sustainability, or sustainable strategic management, embraces a set of corporate processes and strategies that orientate the organisation’s mission, vision, values and culture, and therefore set practical direction on profitable practices which keep the equilibrium of nature and humankind wellbeing. According to Elkington (2004), corporate sustainability is the incorporation of the Triple Bottom Line (economy, environment and social) into corporate priorities aiming sustainable development and profitability. Similarly for Hart (2012, p. 19), strategic sustainability represents an opportunity for the organisations “to make money and to make the world a better place” by developing internal capabilities associated to the context in which they operate. Berns et al (2009) argue that these abilities are also motivational factors for the organisations to pursue strategic sustainability, since they also enable the companies’ development against challengers, such as: capacity to work in a system wider basis with society and environment, ability to respond positively to a long-term system thinking, capacity to re-think and re-design its business models (including financial, products and services), and finally, ability to communicate and partner with a wide range of stakeholders.

In practice, these capabilities allow the company to move from early stages of performing in a responsive and incremental way, merely integrated to the operations, to a broader perspective in which the company understands itself as part of an interconnected system within nature and society in which it relies upon to prosper (Stead and Stead, 2010). SustainAbility (2004) demonstrates the evolution of strategic sustainability and acquisition of corporate capabilities in four stages as follows:

- 1st stage - Compliance (commitment with regulations)
- 2nd stage - Profit-orientated / (integrated into the operation for cost reduction and risk minimization)
- 3rd stage - Integration with stakeholders/partner (beyond legal commitment and profit orientation)
- 4th stage - Re-engineer/holistic (as a result of co-participation, the organisation expands business models, products and services)

Complementary to this overview, Hart (2010, p. 16) summarized these stages of corporate sustainability to demonstrate this evolution through the last 60 years as follows: “Stage 1- Pollution Denial (1945 – 1960s); Stage 2 – End-of-pipe regulation (1970–1980s); Stage 3 – Greening (mid-1980s–1990s); Stage 4 – Beyond Greening (1990s–present).” The term “Greening” is used to refer to continuous improvement in incremental or transitional phases.

Hence, corporate internal motivations are migrating from cost reduction, risk management and profit maximization, towards marketing differentiation, brand image, stakeholder recognition and lastly, reputation in advanced stages (Porter and Kramer, 2006; Marrewijk, 2003). Despite these internal motivations, the evolution of strategic sustainability has been driven also for external motivations from environmental stresses already referred together with stakeholders’ pressure, such as: government legislation, consumers concerns, employee’s interests and social licence to operate from communities (Berns et al, 2009 ; Stead and Stead, 2010; Porter and Kramer, 2006).

In other words, all these motivations demonstrate the levels of an organisation’s commitment with stakeholders spheres beyond its limits, being often translated into external direct impacts such as: stakeholder value-creation, responsible and differentiated markets, customer trust, employees satisfaction, sustainable supply chain, communities wellbeing and environmental preservation (Porter and Kramer, 2006; Marrewijk, 2003; Berns et al. 2009). Consequently, since late of the last Century, strategic sustainability has been part of corporate agenda, no more as an only differential element for market advantages, but mainly as an essential factor for business survival in a long-term view. (Galpin and Whittington, 2012; Blowfield, 2013).

2.1.2 Causes of inefficiency

The process towards strategic sustainability is not always successful for organisations and its stakeholders, displaying weaknesses and inconsistences (Porter and Kramer, 2006). The pressure levels and the short-termism view often leads to uncoordinated sustainability activity, ‘‘disconnected from the firm’s strategy, that neither make any meaningful social impact nor strengthen the firm’s long-term competitiveness’’ (Porter and Kramer, 2006 p. 4). In other cases, poor performances and irregular commitments are due to a lack of authenticity in this process since the practices are not genuinely sustainable and seems to exist only to satisfy corporate communications, which are motivated by stakeholder’s influences for the company to state a sustainable policy at the same level or above its peers in the market (Blowfield, 2013; Marrewijk, 2003).

In addition to that, Berns et al (2009) comprehend the existence of other factors associated to the weak corporate performances: ignorance and lack of understanding of what sustainability is, difficulty to adapt sustainability into a business model, lack of action, poor measurement and finally, difficulty to pursue a business case. Some other scholars justify that the cause of fragile performances are due to the company persistence in transitional stages of sustainability strategies, which are no longer enough to address social and environmental issues (Hart, 1997; McDonough and Braungart, 2002). Rather, corporate views require a radical step forward towards transformational strategies added into business which comprises not only reductions and minimising devastation of natural resources, pollution and waste, but also eliminating waste and going beyond simply greening the operations (Hart, 2012; Stead and Stead, 2010).

2.1.3 Transitional and transformational sustainability

Even tough scholars agree that many important advances were made since sustainability started to be incorporated into business strategies. One of the most important discussions today is about how organisations can act by doing more than just reducing problems they create, through using less raw materials or preventing pollution, but being regenerative to environment and to tackle social problems such as poverty, food, water, jobs, education and high consumption patterns (Blowfield, 2013). Traditional approaches of reuse, reduce and recycle are not meeting those last issues, but rather, just “doing less bad”. Hence, some responses include a shift from transitional approaches to transformational ones (McDonough and Braungart, 2002, p.

45). Stead and Stead (2010) defend that restorative organisations should be seen from the perspective of close loops systems, incorporating waste back to production, since they are part of an open loop, coexisting with society and environment. Thus, in this permanent interaction with other systems, instead of generating outputs that ecosystems cannot assimilate or social consequences that society alone cannot deal with, companies should be able to learn how to cohabit by making a business ecosystem dedicated to sustainability as the superior purpose.

This superior purpose is observed in Hart (1997) as reaching a superior performance by developing a unique value preposition, which is “valuable, rare, difficult-to-imitate and non-substitutable” (Hart, 2010, p. 45). From these viewpoints transformational approaches allow organisations to develop new capabilities through breakthrough strategies that generate new markets oriented to solving social and environmental problems while operating, rather than merely decreasing impacts of its operations (Hart, 1997; Hart, 2010; Stead and Stead, 2010).

In other words, to point out the main difference between transitional and transformational approaches, the first are considered incremental because they are short-lived, or just efficient, such as: reduction or minimisation of ecological inputs and outputs back to nature and also tackle superficially social interventions, such as philanthropy and charity. The later approaches, however, have a problem-solve perspective towards nature and people in a permanent way such as: waste and pollution elimination or transformation into new inputs for production as well as more permanent social outcomes, such as people empowerment. Therefore they are considered effective (Blowfield, 2013; Hart, 2010; Stead and Stead, 2010).

2.1.4 Sustainability Value Framework (SVF)

Considering the evolution from transitional to transformational approaches in sustainability as well as emerging market opportunities for organisations, this project will discuss the Sustainability Value Framework (SVF) created by Hart and Milstein (2003), a comprehensive model created to suggest corporative solutions based on both approaches. In order to make SVF even more practical, this project proposes a critical reflection on the application of this model in the light of four transformational sustainability approaches: Cradle-to-Cradle, Circular Economy, Biomimicry and Base of Pyramid.

This framework presents business opportunities to companies to develop their sustainability performance considering internal and external expectations as well as short and long-term perspectives, represented as “today” and “tomorrow”, or transitional and transformational sustainability, respectively. Focusing on transformational strategies, Hart and Milstein (2003) defend that they enable organisations to develop advanced market competences beyond operational ones, which leads to more profitability. From this viewpoint, Hart (2010) argues that organisations that are profoundly reliant on fossil fuels, raw resources and toxic materials, for example, would have potential opportunities to acquire new skills by using clean technologies and create a unique differentiation for business and society. Successful cases are already emerging from the automobile, chemical and plastic sector. Observing the external environment of “tomorrow”, the same firms should be able to increase and deepen a relationship with their stakeholders where they become part of the company’s co- creation of products and services; therefore they are integrated into the business process of generating product stewardship. More than creating responsible products and services, the evolution of this process towards social solutions allows organisations to think and perform business models, which can address society’s needs with regards to poverty and other social inequalities. The focus proposed in this frame is to deliver new business solutions from the base of the pyramid model. From the viewpoint of the organisation, this framework increases legitimacy and reputation as per a deeper level of stakeholder engagement and can turn traditional business models into social oriented business as Hart exemplifies through Grameen Bank in Bangladesh and Hewlett-Packard (Hart, 2010; Mirchandani and Ikerd, 2008).

Complementary, Hart (2010) describes the strategies from SVF, which composes this model: The Buzzword Sort. Both frames can be visualized in the figures 1 and 2 below.

Figure1. Sustainability Value Framework. Source: Hart and Milstein (2003).

Abbildung in dieser Leseprobe nicht enthalten

Figure 2. The Buzzword Sort. Source: Hart (2010)

Abbildung in dieser Leseprobe nicht enthalten

2.1.5 SVF through transformational approaches

Cradle -to - Cradle

Examining Hart’s model through Cradle-to-Cradle, from pollution prevention to evolved stages of clean technology it represents an added value from eco efficiency to eco effectiveness (Kumar and Putnam, 2008). In Cradle-to-cradle, systems are designed to consider waste as a nutrient in two ways: biological or technical. Therefore, instead of saving resources in an eco efficient way or cradle-to-grave, cradle to cradle approach proposes an upgrade in the life cycle analysis, by closing the loop of production (McDonough and Braungart, 2002). On the one hand, the advantages are that nature can digest biological materials. On the other hand, industry can decompose chemical materials into technical closed cycles, permanently reusing and generating a limited amount of waste as possible, reaching therefore eco effectiveness (McDonough and Braungart, 2002). However, some weaknesses of cradle-to-cradle were observed in Kumar and Putnam (2008). Large products such as cars or electro materials would have limitations performing through cradle-to-cradle, as there would be drawbacks in reverse logistics since it is difficult and expensive to pick up products either at B2B or B2C levels. Additionally, there is a lack of robust supply chain, making it difficult to disassemble and re-assemble materials because they were not designed for this new purpose.

Circular Economy

From the view of circular economy product stewardship through stakeholder participation would enable the change from a linear model, or “end of life”, to a circular one. In this circular model innovative solutions to deliver products and services affects not only production with close loops and zero waste, but also changes the relationship of products and its consumption. This suggests new ways of acquisition and usage, such as shared ownership or transforming tangible products into services also known as servitasation, eg. leasing. Organisations like Xerox, Renault, Ricoh, IKEA and Unilever developed this approach in their production and commercialization: leasing their products and receiving them back to the industry until the end of its line (MacArthur, 2013).

The common benefits experienced by these companies are: it enables industry innovation, job creations, capital efficiency, and a more resilient economy in the long- term with new ways of consumption instead of traditional consume-dispose (MacArthur,2013).

The limitations of circular economy are associated to its novelty rising from the current capitalism system. Xu and Wu (2009) argue that scaling up, especially in developing countries, would depend upon a very conductive public policy and change in the legislation framework, by first reinforcing compliance, and later generating incentives for technological investments, research and development and know how transfer. Leadership is a paramount key to catalyze this process.

Biomimicry

Disruptive clean technologies are the target of Biomimicry as an innovative way of designing product systems considering nature as an inspiration in its conception of industrial systems and manufacturing products as well as implementing solutions in agriculture, chemical science, and nanotechnology among others (Benyus, 1997). For this purpose biomimicry imitates nature in its features such as: use of renewable energy, decomposable characteristics of materials, permanent use of all types of waste as nutrients to feed systems and make use of diversity to constitute strong partnerships in order to ensure resiliency. Health, transportation and IT sectors are benefiting from a biomimicry approach (Benyus, 1997). Criticisms of biomimicry relate to the high level of resistance or corporate facing the risk of not having return on investment after transforming the industrial clean design into products in which the market is not ready to absorb. Hence, consumer mindset shift should move in parallel with research and development (Volstad and Boks, 2012).

Bottom of the Pyramid

Lastly, the Bottom of the Pyramid or BoP approach applies to a high population living in poverty and other social inequalities. According to Prahlad (2005) it is possible to eradicate extreme poverty and to generate sustainable development with solutions to poor people with added value and low costs of acquisition. These solutions would bring profitability to investors in the long term considering the high volume of purchases, even with small profit margins and also in the supply chain value, by generating jobs and qualifications. Telecoms, cosmetics and large food organisations are among the main pioneers adding value to their business in developing countries (Prahlad, 2005). However, BoP also has some drawbacks that can potentially damage small business and intimidate income generation of other entrepreneurs. It can also contribute to waste generation if clean technologies are not associated to this business model, creating a reverse of its original aims (Warnholz, 2007).

2.1.6 Evaluation of SVF’s

Hart’s model has a broad approach that provides opportunities for companies to develop capabilities and improve performance in different stages of development in strategic sustainability. It has been a useful resource to identify the approaches used by Brazilian companies and to understand the developmental stage. However, the complexity of this model resides in being put in to practice for more advanced approaches, as the novelty ais perceived with excitement and reluctance at the same time by the market, especially in developing countries where strategic sustainability is a relative new topic, as will be shown in the next section. Scholars suggest that the reasons for resistance that is delaying more advanced approaches are, on one hand, in the amount of investment in research and development versus the uncertainties of return on investment and, on the other hand, the lack of corporate and political leadership to foster innovation into the mainstream.

2.1.7 Corporate sustainability in Brazil

In order to have a clear understanding of corporate sustainability in contemporary Brazil it is necessary to follow the evolution of historical factors from the 1970s to present day in which society and organisations have been gradually incorporating sustainability into their mindsets and business operations (Paro and Boechat, 2008; Barata, 2007; Gife, 2013). During the 1970s the government was the main inductor of social and environmental investments. However, in the beginning of the 1980s the civil society played a role with social movements against hunger, combating poverty and ensuring basic education. As a result of these social inequalities, individuals and organisations started to act on a philanthropic basis (Young, 2004).

In the 1990s firms established a systematic support delineating the first steps of corporate social responsibility, or CSR. This CSR was accelerated by the pressure from stakeholders, consumers, clients, media, and NGOs among others and initiated a response to shortages of natural resources (Young, 2004). Hence, increasing diversity of private actors has allowed perfecting corporate mechanisms to support society’s needs (Paro and Boechat, 2008). One of these models which derives from CSR that gradually gained relevancy since the 1990s was the Private Social Investment, or PSI, in which privative organisations directly intervene in social and environmental issues through investing in foundations and institutes’ programmes in a more strategic manner, as PSI involves metrics of evaluation of return over investment and is more associated to the core business of a company (Gife 2013).

Some figures reveal the evolution of organisations and investments that evolved from philanthropy stages to strategic CSR and PSI from the 1980s up to present day. With regards to CSR, Ethos Institute, the main organism, which disseminates and incentivizes CSR culture nationally, congregated 11 organisations when it was founded in 1998. Today, the institution has 586 associated organisations (Ethos, 2015; Young, 2004). On behalf of PSI, more than U$ 833 billion was invested in 2013 by organisations into foundations and institutes aligned its business targets (Gife, 2013). This optimistic scenario in the private sector opens a perspective to the corporate involvement in environmental and social issues through strategic sustainability, the next level of organisational’s intervention according to Eight (2014).

Strategic corporate sustainability is a topic that has progressively been part of the agenda of large organisations in Brazil due to a combination of specific drivers: leadership awareness, scarcity of material resources, public pressure, risk management and reputation and legitimacy (Barata, 2007; Lourenço and Branco, 2013). Some indicators which will be examined in detail below point out this increasing trend: changes in the Brazilian stock market, increasing practices of accountability reporting and change in businesses and consumers mindset (Paro and Boechat, 2008; Exame 2013).

The first factor, which incentivizes corporate sustainability, is the Sustainability Index created by São Paulo Stock Exchange-Bovespa that was launched in 2005 aiming to rate the interest of listed organisations committed to sustainability. Similar to other mechanisms such as Down Jones Sustainability Index and FTSE4Good in London Stock Exchange, the Brazilian version is comprised of 40 organisations engaged in 19 different sectors (Bovespa, 2015).

The second factor refers to accountability and reporting as a trend, which confirms the increasing commitment of businesses. In this area, 160 Brazilian organisations are currently reporting using Global Reporting Initiative - GRI framework. This number increased from 74 in 2014, placing Brazil as 4th in the international ranking. Furthermore, 11% of worldwide organisations reporting with Integrated Reporting Council – IIRC are Brazilian, placing Brazil in third place, after the United Kingdom and the Netherlands (IR, 2015; GRI, 2015; Exame 2013).

The third factor that indicates a conductive environment for strategic sustainability is the Brazilian society mindset. According to Gife (2013), Brazilian expectations of ethical conduct of organisations act beyond their goals and financial and legal responsibilities. Currently most of the public (52%) require business ethics that transcends the classical responsibilities of the private sector. Similarly, environmental issues are part of Brazilian’s concern in which three out of four companies expect a high degree of interest in the environmental behavior of companies. Finally, consumer behavior is also evolving towards responsible choice patterns. According to Gife (2013) 60% of consumers consulted in surveys believe that the power of individual’s choices for ethical products support environmental balance, while 68% agree that they need to consume less in order to increase environmental resilience for future generations, and the other 54% would pay more for sustainable products (Gife, 2013). In complement to that Eight, (2014, p. 24) states some main trends of consumers are influencing organisations to meet their needs are: collectivism, servitasation or dematerialization of products, shared values and digital competence.

Despite of the drivers and positive indicators mentioned, Paro and Boechat (2008) argue about the need of Brazilian organisations to refine sustainability, considering its core business against local needs. In other words, there are disconnections and a lack of alignment between strategies and core business and these lead to poor results to both sides in Brazil (Paro and Boechat, 2008). However, weakness and strengths reflect opportunities and challenges in which Brazilian society is evolving as a result of joined efforts with companies and its stakeholders (Lourenço and Branco, 2013). In complement to these opportunities, Hart (1996, p. 70) argues that emerging economies are mostly using incremental approaches to tackle pollution, depletion and poverty challenges. However, they should take the lessons not learnt from developed nations and can “not afford to repeat these mistakes”.

Part A summary

Sustainability embedded into business strategies or strategic sustainability is the next level in which companies can create policies and act and manage results in a responsible manner for society, the environment and the economy. The current scenario described so far requires much more than transitional solutions, but also transformational ones. Hart’s framework suggests advanced approaches in this direction, but it also has drawbacks and difficulties to be implemented in developing nations. The Brazilian context has been evolving from philanthropy to strategic sustainability driven by organizational and consumer awareness. This represents opportunities to engage and perfect sustainability approaches. However, these advanced stages of sustainability are mainly restricted to large organisations as per influence of leadership and finance resources combined.

2.2 Part B Sustainability Leadership

Introduction

Part B of this chapter dedicates attention to explain the purpose of sustainability leadership and its concepts that are relevant for the research question of this project. It starts by examining classical approaches of sustainability leadership and controversial points and critiques. Then, the section follows scrutinizing this leadership according to its different streams thoughts: task and behavior orientated. In both streams, this section displays concepts and models and analyses limitations, which represent an opportunity for this study to address. Finally, this section examines new trends in sustainability leadership, stating a multiple factor approach, including contextual factors into the two existing streams and broadening the meaning of sustainability leadership which can respond to current challenges.

2.2.1 New ways to lead are required

Leadership is widely recognized as one of the successful factors leads organisations to good performances. It has been described in extant literature as a practice which involves, influences, defines results, accomplishes goals and engages teams to fulfill their potential (Northouse, 2007; Yukl, 2013; Whatmore, 1999). However, the dynamic panorama of business today has been changing from the traditional pattern of produce, consume and dispose, to sustainable ways of using raw resources, manufacturing and consuming (Hart, 2010; Mc Donough and Braungart, 2010). Hence, as it is so important to have physical infrastructures, innovation technology and applied knowledge available, it is needed to count on a leadership which can commit and encourage new behavior patterns and implementing strategies to thrive positive impacts for three systems: organisations, societies and environment, translating sustainability challenges into practical actions (Visser, 2008; Benn, Dunphy and Griffiths, 2014). Consequently, scholars are currently dedicating efforts to apply leadership to sustainability issues, therefore impacting the society positively (McEwan and Schmidt, 2007; Galpin and Whittington, 2012; Ferdig, 2007).

The pressure for this type of leadership originates from facts associated to limited progress in corporate sustainability (Bendell and Little, 2015; Sustainability, 2012). According to Accenture (2013) 1/3 of 1,000 corporate leaders recognize that the efforts have not been enough to achieve societal goals. This resonates with scientific data revealed in thematic events since Rio 92 to Rio+20 in 2012. Recent evaluations of the sustainable development agenda showed that a poor progress was done in comparison with negative figures with regards to shortages of clean water and its pollution, exhaustion of natural resources, loss of biodiversity, and climate change, demonstrated in figure 3 (Sustainability, 2012). This disproportional balance added to the low speed of leaders providing solutions revealed the need for a catalytic leadership applied to sustainability, having a singular ability to cross public sector, business and civil society, building coalitions and sharing responsibilities towards sustainable development (SustinAbility, 2012; SustinAbility, 2015; Benn, Dunphy and Griffiths, 2014).

Figure 3. Sustainability critical issues (source: SustainAbility, 2012)

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2.2.2 Definition of sustainability leadership

Sustainability leadership emerged in parallel with sustainable development’s collective discussions aiming to tackle complex issues aforementioned, therefore its different designations were developed having the sense of purpose and change as a main background (Brown, 2011). Yet, sustainability leadership is not a pure approach, but it derives from conventional leadership classical theories: grounded, situational and individual (Bendell and Little, 2015). In additional to that, there are more than 20 types of different terms for this leadership since academics investigated this topic from different viewpoints, generating an overlap of meanings (Brown, 2011). Despite exploring all these terms which are displayed in appendix 1, this project has focused on the two major classifications of this leadership which will set a background for further discussion: (1) values-orientation, based on behaviour and personal traits; (2) technical- instrumental” or task orientated (Bendell and Little, 2015 and Blowfield, 2013).

Definitions of sustainability leadership from the development of leader’ behaviours are seen in Bendell and Little (2015, p. 4) as “the ethical intention of helping groups of people to achieve environmental or social outcomes”. Similarly, Metcalf and Benn (2013) describe it as a process that requires agents’ abilities to predict and act in a complex scenario, engaging teams and adapting constantly. Lastly, Schein (2015) centred sustainability leadership in a leader’s ability to have an ecologically orientated worldview, combined to long-term view and critical capacity, which enables organisations to implement and succeed sustainability practices.

Inversely, attributing less emphasis on the leader’s behaviours, yet focusing on power decentralization and purpose, sustainability leadership is seen by Foster (2015) as a collective act which results in a group agreement towards a shared purpose. Hence, this leadership “is extended to anyone who seeks sustainable change regardless of role or position”, therefore the role of the leader is to engage others to seek fundamental changes (Ferdig, 2007, p. 3).

2.2.3 Streams of sustainability leadership

2.2.3.1 Behaviour oriented leadership

This first stream encompasses the way the leader’s personal characteristics are conductive to sustainability results. This project will present some of the main classical approaches recognized by its importance for sustainability leadership and the recent perspective of leadership development based on traits and behaviors applied to sustainability: Leadership Development Framework (LDF) as per its relationship with the two topics of this study.

Classic approaches:

Transformational Leadership

Transformational leadership is based on the belief that leaders and followers can support themselves mutually and progress with motivation, having the leader as a charismatic figure who motivates not only for the accomplishment of the task, but also to excel expectations by the leader’s accurate vision, coaching, integrity, ethical values, commitment and enthusiasm (Avolio and Bass, 1995). This style recognizes differences between individuals and improves their capabilities in order to reach higher levels of performance (Avolio and Bass, 1999). Bass and Avolio (1993) defined the basilar characteristics of transformational leaders, denominating them as the 4I’s: Influence, inspiration motivation, intellectual stimulation and individualized consideration.

Because of its relevance and focus on personal leaders’ qualities mentioned above, transformational leadership has been largely utilized to define leaders whose challenges encompass sustainability (Hay, 2010; Hargreaves and Fink, 2012; Timmermans, van der Heiden, and Born, 2014). Common characteristics found on sustainability leaders that echo on transformational leadership are: create a vision of a desirable future, valorise relationships that contribute to mutual development, learn by coaching and systematic reflection (Vinkhuyzen and Vinkhuyzen, 2014; Benn, Dunphy and Griffiths, 2014).

Authentic Leadership

Authentic leadership is grounded on the principle of authenticity, which means that these leaders are genuine with themselves. Indeed, this principle orientates the authentic relationships as a fundamental value of this model and relies upon social justice, equality, honesty, trustworthiness and responsibility (Avolio and Gardner, 2005). The authentic leaders have an important concern of the way that they are perceived by others, being aware about their moralities, beliefs and visions as well as their own values in the context in which they work. These concerns confer to the leader a high level of self-awareness and self-regulation on an individual level.

Connections between authentic leadership’s characteristics and capabilities required for project sustainability managers roles are shown in Lloyd-Walker and Walker (2011).

This study reveals characteristics that the current generation and the next generation of leaders should possess in order to satisfy growing demands across organisations, society and environment: value driven, relationship centered, realistic and confident, positive, visionary and resilient.

Visionary Leadership

Visionary leadership has been constantly discussed in the literature as the leader’s capacity of inspiring and compelling a vision in which followers can personally identify and pursue. These elements enable organizational change and lead to performance effectiveness (Groves, 2006; Robertson, 2002; Waite, 2013). Visionary leadership applies to uncertain corporate environments and external crises that demand re- organisation of structures in a dynamic way having in visionary leaders a source of robust effort, personal commitment and emotional intelligence. Strong traits that are based on visionary leadership are: self-awareness, communication capacity, positive thinking, determination and consistency (Groves, 2006).

Characteristics of visionary leadership play an important role in advanced phases of implementing sustainability such as proactivity and sustaining the corporation targets. In these stages the leader is required to work in a more complex scenario where radical changes in the mindset inside and outside the organization and re-thinking systems and processes are needed (Benn, Dunphy and Griffiths, 2014). In these stages, a personal commitment active network and engagement, enabling third parties’ power constitutes the set of the leaders’ profile.

Critiques of classic approaches

Despite the personal characteristics in transformational, authentic and visionary leadership mentioned above being conductive towards strategic sustainability, there are many weaknesses and limitations when using solely these approaches (Benn, Dunphy and Griffiths, 2014; Bendell and Little, 2015). The ground for these limitations relies on two views that these approaches are primarily based on: the dominant Western culture and the anthropocentric paradigm. The first view argues that these leaderships have been predominantly influenced by Western culture, which frequently stereotypes the leader as a hero figure, a self-centered powerful man (Mirvis et al, 2010; Quinn and Dalton, 2009;). The leader’s robust traits of personalities and characteristics enable him to lead from a top-down hierarchical and command and control perspective that the media glamourizes and perpetuates (Mirvis et al, 2010; Higgs, 2009;). Therefore, this over attribution of power and self-centrism, undermines changes towards sustainability since the leader’s narcissistic view ignores collaboration and incentivizes competition, eventually leading to corruption and illegal activities, bullying, coercion, and bias with gender (Gregory Stone, Russell and Patterson, 2004; Wood, 2007; Van Wart, 2013).

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