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Corporate sustainability is at a crossroads. For too long, too many businesses have approached corporate sustainability as a compliance exercise focused on mitigating environmental and social risks rather than seizing strategic opportunities. However, in an era of accelerating climate breakdown, resource scarcity, geopolitical instability, and shifting stakeholder expectations around the world, sustainability can no longer be relegated to corporate social responsibility (CSR) teams' internal brand or siloed ESG reports for investors. The transformative opportunity, now more than ever, lies in corporate sustainability becoming an organizing and energizing dimension of core corporate strategy, governance, and operations—one that enhances resilience, drives innovation, and delivers durable multi-stakeholder value in a world that is, increasingly, on fire (see SR Inc's review of Rebecca Henderson's Reimagining Capitalism in a World on Fire).

At Sustainability Roundtable, Inc. (SR Inc), we have always defined corporate sustainability as all about the creation of multi-stakeholder value for the long term in a world threatened by unprecedented and growing uncertainty. For more than fifteen years, we have advised sustainability and global operations executives at more than 100 multi-year Member-Clients, including dozens of the world’s leading information, communication, and technology (ICT) and life sciences companies.  As SR Inc colleagues and I have detailed in SR Inc’s first book Dignity First Leadership; Developing & Driving a World-class Sustainability Strategy which we will release later this year, we have observed a clear pattern: firms that approach sustainability as a strategic transformation process—rather than a compliance burden—gain an enduring competitive advantage. 

For this Sustainable Leadership post, I will draw from Stuart Hart’s 2024 book Beyond Shareholder Primacy: Remaking Capitalism for a Sustainable Future, particularly Chapter 5, “Re-embedding Purpose” and Chapter 6, “Redesigning Corporate Architecture.” Professor Hart has decades of experience leading on Corporate Sustainability strategy and provided our afternoon keynote at SR Inc’s Summit for Sustainable Business VIII in D.C. in December.  Professor Hart is 100% aligned with SR Inc as a long-time champion in recognizing that corporate sustainability must be structurally embedded in governance and business strategy to enable it to help companies outperform peers in the near, mid, and long term. In his latest book, Professor Hart cogently integrates and summarizes foundational strategic management theories—including Alfred Chandler’s assertion that “structure follows strategy,” Kenneth Andrews’ concept of corporate purpose and social responsibility, Jay Galbraith’s Star Model for strategy implementation, and Henry Mintzberg’s framework for emergent strategy—to outline a practical roadmap for sustainability executives aiming to develop and drive world-class sustainability strategies.

I. The Problem: Sustainability as a Compliance-First Function Is a Losing Strategy

For most large enterprises, sustainability efforts are still primarily reactive and compliance-driven. Executives are under pressure to meet CSRD (Corporate Sustainability Reporting Directive), IFRS (International Financial Reporting Standards), and ISSB (International Sustainability Standards Board) requirements—but these frameworks, while essential, are no substitute for shaping enterprise strategy towards high performance in a more uncertain world which is the right objective.

Sustainability teams that focus first and overwhelmingly on disclosure risk will become bureaucratic cost centers rather than the catalysts for innovation and value creation that a well-advised sustainable leader can inspire. The most successful companies recognize that sustainability is not just about risk mitigation—it is about strategic differentiation, resilience, and a deeper, more authentic stakeholder trust premised on impressive commercial integrity and demonstrated excellence.

II. From Reporting to Strategic Capability: Process Capability Drives Sustainability

Hart presents the receipts in his new book, and his primary research supports a key insight: companies that develop higher levels of “process capability” in multiple modes of strategy-making achieve superior performance. In other words, leading firms do not merely plan sustainably—they develop systems and processes that continuously adapt and integrate sustainability into core business decisions.

SR Inc has been committed to this for nearly two decades. Our Sustainable Business & Enterprise Roundtable (SBER) service helps sustainability executives move beyond compliance-driven ESG reporting to strategy-driven corporate sustainability transformation. Our structured advisory model includes a confidential annual SBER Management Diagnostic, a peer benchmarking SBER Assessment, and a gap-analysis-driven SBER Member Advisory Plan (MAP). Through this annual change management process, we enable sustainability leaders to benchmark progress, identify critical gaps, and systematically improve strategy implementation as they move beyond reacting to growing mandatory reporting requirements. Rather, they can join with world-leading peers to truly master mandatory reporting, which has been the title of SBER’s central shared-cost primary research-based SBER Executive Guidance & Tools for multiple years.

SR Inc developed our SBER Management Diagnostic, structured across six key dimensions of change management —Vision, Governance, Strategy, Guidance, Implementation, and Reporting— to help SBER Member-Clients each year through their confidential peer benchmarking SBER Assessment, which empowers us to develop gap analysis for efficient improvement. The SBER Management Diagnostic scores annually adjusted maturity index-based questions and answers to help executives track sustainability progress against evolving best practices on a granular, capability-driven basis. This supports our SR Inc’s full time team in assisting SBER Member Executives week-over-week and year-over-year, which enables Member Executives to be proactive in focus and resources to facilitate not only high performance on proliferating external ESG scores or third-party rankings but more importantly, on enterprise success.

This process-oriented, capability-building approach aligns with Hart’s argument that sustainability must be embedded in the firm’s broader organizational architecture, governance structures, and strategy execution processes to drive impact at scale and enable the enterprise to identify and grow into an improved strategic positioning and process.

III. Corporate Purpose as a Strategic Foundation: Andrews’ Foundational Insight

Kenneth Andrews’ foundational work, The Concept of Corporate Strategy, last updated in 1987, demonstrated that corporate purpose is inseparable from strategy. Purpose is not an abstract mission statement—it must define and guide decision-making, resource allocation, and stakeholder engagement.

For sustainability executives, this means:

• Aligning corporate purpose with stakeholder dignity—ensuring that sustainability initiatives generate real value for customers, employees, investors, suppliers, and host communities.
• Embedding sustainability goals into strategic planning and investment decisions rather than treating them as separate CSR or philanthropy efforts.
• Creating mechanisms for purpose-driven innovation ensuring sustainability is a driver of new business models, products, and services.

SR Inc guides sustainability leaders in aligning corporate purpose with sustainability strategy by mapping sustainability initiatives to core business value drivers—such as customer acquisition, employee retention, operational efficiency, and investor appeal.

IV. Chandler’s Governing Principle & Sustainability: Structure Follows Strategy

Alfred Chandler’s famous dictum, “structure follows strategy,” from his 1962 book Strategy and Structure: Chapters in the History of the Industrial Enterprise, underscores that a company’s organizational design must evolve to support its strategic objectives. Sustainability cannot remain a peripheral function—it must be structurally embedded into governance and decision-making at the highest levels.

Leading sustainability executives ensure that:

• The Board of Directors has dedicated sustainability oversight, with sustainability committee structures that integrate environmental and social governance into enterprise risk management.
• The Chief Sustainability Officer (CSO) reports directly to the CEO rather than being buried within corporate affairs or compliance functions.
• Sustainability KPIs are integrated into executive compensation, ensuring alignment with financial performance and operational targets.

At SR Inc, we work with Member-Clients to design sustainability governance structures that ensure accountability, elevate sustainability leadership, and align incentive structures.

V. The Star Model: Aligning Strategy, Structure, and Incentives for Execution

Dave Stangis’ (Chief Sustainability Officer at Apollo Global Management) and Katherine Valvoda Smith’s (Executive Director of the Center for Corporate Citizenship) book 21st Century Corporate Citizenship; A Practical Guide to Delivering Value to Society and Your Business brought Jay Galbraith’s famed Star Model framework for translating strategy into execution—to the corporate sustainability-minded when it was published in 2017. Galbraith’s Star Model is helpful for sustainability leaders working to embed purpose into enterprise operations. The model identifies five organizational levers integrated into SR Inc’s annual SBER Management Diagnostic that must align to drive the embed:

• Strategy – Sustainability must be a core strategic priority, aligned with long-term value creation—not a side initiative.
• Structure – Organizational design should elevate sustainability leadership, with board oversight and CSOs reporting directly to the CEO if at all possible.
• Processes – Strategic planning, risk, and investment processes must integrate ESG goals. Technology plays a key enabling role here but is not a standalone pillar in the original model.
• Rewards – Incentives and compensation must reinforce sustainability outcomes, tying performance to purpose.
• People – Hiring, leadership development, and internal culture must build sustainability fluency and commitment across the enterprise.

SR Inc’s SBER service leverages this model to help Member-Clients design holistic sustainability architectures—aligning strategy, structure, and incentives to embed sustainability into core operations. Through peer benchmarking, diagnostics, and structured advisory support, SBER enables Member-Clients to efficiently develop and execute adaptive sustainability strategies in a manner CEOs can understand, endorse, fund, and champion.

VI. Emergent Strategy: The Role of Adaptation and Continuous Learning

Henry Mintzberg’s work on emergent strategy, in his article “The Strategy Concept I: Five Ps For Strategy,” published in 1987, highlights that strategy is not just a top-down planning exercise—it must evolve in response to changing conditions. Sustainability leaders must embrace agility, experimentation, and continuous learning.

SR Inc supports this adaptive approach through:

• Continuous benchmarking and industry peer assessments that help companies learn from best practices.
• Cross-sector innovation-sharing, ensuring sustainability teams stay ahead of regulatory, technological, and market shifts.
• Iteration-driven strategy implementation, allowing sustainability leaders to course-correct based on real-world performance data

VII. Scaling Sustainability Strategy Through Shared-Cost Advisory Services

Given the initial complexity of a transformation to greater enterprise sustainability, no single firm can navigate the transition alone. SR Inc’s shared-cost industry leadership model—which combines the confidential SBER Management Diagnostic, peer benchmarking SBER Assessment, and strategy execution support through the annual SBER MAP—enables Member-Clients to access world-class sustainability advisory services. These services are better evidenced about what has been proven to work at a fraction of the cost of conventional one-to-one Scope of Work-based consulting. By leveraging SBER’s structured annual strategy management solution and week-over-week, quarter-over-quarter, and year-over-year support, companies move beyond “ESG Reporting” to purpose-driven, strategy-aligned sustainability transformation. This enables their enterprise to improve its top and bottom lines as it captures more market and margin in a world facing unprecedented challenges.

Conclusion: The Future of Sustainability is Not Compliant, It’s Strategic

Corporate sustainability is long past the public relations function it was at Fortune 100 B-to-C brands twenty years ago. It is increasingly a strategic imperative that can shape a corporation's relationship with its most sought-after customers, talent, investors, suppliers, and host communities worldwide. Professor Hart’s insights, building on those of Chandler’s, Andrews’, Galbraith’s, and Mintzberg’s foundational strategy principles, affirm that sustainability must be structurally embedded into governance, strategy, and operations.

Through SR Inc’s SBER intensive full-time team-based year-round support, sustainability executives gain the insights, tools, processes and week-over-week and year-over-year assistance needed to win and build C-Suite support and embed sustainability into corporate architecture. Doing so can help drive strategic innovation and create enduring multi-stakeholder value—not just to comply with regulations but to lead in a world always more in need of leadership.