Strategic Sustainability Risk Management in Product Development Companies: Key Aspects and Conceptual Approach

Jesko Schulte, Carolina Villamil and Sophie I. Hallstedt
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Jesko Schulte: Department of Strategic Sustainable Development, Blekinge Institute of Technology, SE-37179 Karlskrona, Sweden
Carolina Villamil: Department of Strategic Sustainable Development, Blekinge Institute of Technology, SE-37179 Karlskrona, Sweden
Sophie I. Hallstedt: Department of Strategic Sustainable Development, Blekinge Institute of Technology, SE-37179 Karlskrona, Sweden

Sustainability, 2020, vol. 12, issue 24, 1-20

Abstract: Society’s transition towards sustainability comes with radical change, which entails significant threats and opportunities for product development and manufacturing companies, for example related to new legislation, shifting customer preferences, and increasing raw material prices. Smart risk management therefore plays a key role for successfully maneuvering society’s sustainability transition. However, from a company perspective, it remains challenging to connect the macro-level societal change with tangible risks for the business on the micro level. Based on interviews with academic and industrial experts, this study identified 21 key aspects for sustainability risk management. Drawing on these results and research from the areas of transition design, strategic sustainable development, and sustainability risk management, a conceptual approach for strategic risk management within the sustainability transition is presented. It builds on layered, double-flow scenario modelling in which backcasting from a vision, framed by basic principles for sustainability, is combined with forecasting from the present. The implications of such scenarios, i.e., risks, can then be identified and managed. By doing so on different scales, connections between macro- and micro-level change can be established. Thereby, product development companies shall be supported in making sustainability an intrinsic part of decision-making across the strategic, tactical, and operational levels to increase competitiveness while contributing to the transition towards a sustainable society.

Keywords: sustainable product development; backcasting; strategic sustainable development; transition design; Environmental Social and Governance (ESG) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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