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Company Risk Management in Light of the Sustainability Transition
Blekinge Institute of Technology, Faculty of Engineering, Department of Strategic Sustainable Development.
Blekinge Institute of Technology, Faculty of Engineering, Department of Strategic Sustainable Development.ORCID iD: 0000-0002-7382-1825
2018 (English)In: Sustainability, ISSN 2071-1050, E-ISSN 2071-1050, Vol. 10, article id 4137Article in journal (Refereed) Published
Abstract [en]

Many of the most important business and economic risks are directly linked to environmental and social issues. This includes both threats and opportunities, not only in relation to reputation, which is often mentioned in this context, but, even more importantly, in relation to innovation capability and legislative change on inevitably more and more sustainability-driven markets. It is, however, unclear through which mechanisms such sustainability risks currently affect companies and how they can be systematically identified and managed. Based on the Framework for Strategic Sustainable Development, this study investigates the dynamics and implications of society’s sustainability transition from a company risk management perspective. In addition, exploratory and descriptive studies were conducted at two large product innovation companies to identify current risk management practices and preconditions for sustainability integration. The results reveal that a society moving closer towards a collapse of environmental and social systems leads to increasing sustainability-related threats for unsustainable businesses and increasing opportunities for sustainable businesses. Also, risk management is found to be a promising way for maneuvering in a smart zone between being too passive and being too pro-active in relation to sustainable innovation.The study participants at the case companies were knowledgeable about risk management in general but were largely unfamiliar with risks associated with sustainability and no processes or support tools exist to work systematically with such risks. Key steps to accomplishing an integration of a strategic sustainability perspective into risk management are proposed as: (i) identifying the effects of sustainability issues on internal and external stakeholder value; (ii) actively including sustainability in objective setting and cascading objectives across the levels of the organizational hierarchy; and (iii) developing concrete support for identifying, assessing, and managing economic sustainability risks. Thereby, companies can enhance their competitiveness while providing leadership in the sustainability transition.

Place, publisher, year, edition, pages
2018. Vol. 10, article id 4137
Keywords [en]
risk management, sustainability, product innovation, strategic sustainable development, sustainable product development, sustainability transitions, sustainable development
National Category
Environmental Sciences
Identifiers
URN: urn:nbn:se:bth-17246DOI: 10.3390/su10114137ISI: 000451531700311OAI: oai:DiVA.org:bth-17246DiVA, id: diva2:1262276
Projects
Model Driven Development and Decision SupportSustainability Implementation Package
Funder
VINNOVA, 2018-00361Knowledge Foundation, 20120278
Note

open access

Available from: 2018-11-10 Created: 2018-11-10 Last updated: 2019-02-21Bibliographically approved
In thesis
1. Sustainability Risk Management in Product Development Companies - Motivating Change
Open this publication in new window or tab >>Sustainability Risk Management in Product Development Companies - Motivating Change
2019 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

Both the ecological and social system are systematically degrading, resulting in decreasing capacities to support human civilization. Product development and manufacturing companies play a key role in driving society’s transition towards a sustainable path. Besides moral arguments, the motivation for companies can be expressed as a matter of smart risk management, i.e. avoiding threats and exploiting opportunities. Such sustainability risks can be related to, for example, brand and reputation, legislative change, or attracting top-talented employees. But, more importantly, it is about understanding changes that are inevitable on markets to come. Based on Maxwell’s interactive qualitative research approach and following the structure of the Design Research Methodology, this thesis aims to contribute (i) to knowledge by increasing the conceptual understanding of what sustainability risks are; and (ii) to practice by researching decision-support for how sustainability risks can be managed in a product development company context. The first study reviewed existing literature and identified characteristics of sustainability risks, which make them particularly difficult to manage. A following exploratory and descriptive study investigated companies’ current risk management practices and preconditions for sustainability integration. It showed that the effects of uncertainty from the sustainability transition need to be identified, assessed, and managed in relation to how they can affect objectives anchored in both internal and external stakeholder value creation. In parallel, the Framework for Strategic Sustainable Development was applied as a lens to understand the implications of the sustainability transition for company risk management. This resulted in a new definition, stating that sustainability risks are threats and opportunities that are due to an organization’s contribution or counteraction to society’s transition towards strategic sustainable development. A questionnaire study then investigated some case companies’ challenges and preconditions to build sustainability capabilities. Finally, a workshop method is proposed that aims to support design teams in early sustainable product development. Future research will leverage on the findings to develop and test decision support for how product development companies can manage sustainability risks on different organizational levels in practice to increase competitiveness, while taking leadership in the transition towards a sustainable society.

Place, publisher, year, edition, pages
Karlskrona: Blekinge Tekniska Högskola, 2019
Series
Blekinge Institute of Technology Licentiate Dissertation Series, ISSN 1650-2140 ; 5
Keywords
corporate sustainability, product innovation process, sustainability transition, sustainable design, sustainable product development
National Category
Environmental Sciences
Identifiers
urn:nbn:se:bth-17631 (URN)978-91-7295-371-0 (ISBN)
Presentation
2019-03-27, J1650, Blekinge Tekniska Högskola, Valhallavägen, Karlskrona, 09:00 (English)
Opponent
Supervisors
Funder
Knowledge FoundationVinnovaKnowledge Foundation
Available from: 2019-02-22 Created: 2019-02-21 Last updated: 2019-03-20Bibliographically approved

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Schulte, JeskoHallstedt, Sophie

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