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1. Introduction
A survey by KPMG in 2008 found that 47.7 per cent of companies considered sustainability and corporate responsibility an important driver of innovation ([5] KPMG International, 2008). However, for the majority of companies, understanding how to make their businesses more sustainable was a challenge. The areas that posed the greatest challenge for approximately 80 per cent of companies were identifying and prioritizing issues, developing strategies and policies and measuring performance. This finding is in line with anecdotal evidence from our consulting work. The Director of Sustainability of a large manufacturing company in New South Wales, Australia, for example, stated: "For us, sustainability is important, both at the strategic and the operational levels. That is why we created the position Director of Sustainability about six months ago. However, for me, as Director of Sustainability, the challenge is to identify the areas that need a greater sustainability focus, to develop appropriate strategies and to oversee their implementation. [...] It is a very complex process." Similarly, the owner of a small business in Victoria, Australia, commented: "My aim is to grow my business in a sustainable way, but I do not have the knowledge to do it. I have reduced waste and use more recycled materials, but I would like to implement a more comprehensive approach to make my business model more sustainable." These quotes illustrate the complexity and some of the difficulties managers experience when trying to make their businesses more sustainable.
In this paper we argue that for organizations to achieve sustainability, managers must address the different aspects of sustainability during the strategic decision-making process and incorporate them into their corporate, business and functional level strategies. Our discussion focuses on the broader holistic understanding of strategy (as opposed to an instrumental, operational-level approach aimed at enhancing the reputation of the organization). We develop a framework that managers and scholars can use to assess the degree to which organizations have strategically addressed sustainability and to identify opportunities for further improvements. An analysis of the individual elements of the framework is provided and illustrated with practical examples. However, it is first necessary to consider the term sustainability and how it has been used in a business context.
2. What is sustainability in a business context?
The...