Sustainability goal setting with a value-focused thinking approach

Abstract

Firms are increasingly setting themselves business goals that are more and more sustainability-oriented. It is, however, unclear what the rationale behind the sustainability-related decisions are: whether the improvement of sustainability is the fundamental purpose of the firm’s business or whether sustainability is just an opportunity to improve some of the firm’s competitive factors, such as reputation and image, i.e., a means to achieve economic success. We suggest that to be able to assess the consequences of sustainability-related decisions better, a factual basis is needed, and for that, sustainability science offers a proper perspective. Sustainability science helps decision makers to understand how the firm can contribute to a more transformational change with its sustainability objectives. An approach called value-focused thinking is helpful in clarifying the strategic goal-setting process and the role of sustainability goals in it, and in connecting values to firms’ strategic decision-making. In addition, the values and objectives can be analyzed by applying the concepts of alternative objective functions for the firm in order to understand the relationship of profit and sustainability in the decision-making context. In this chapter, we present a Values-Driven Sustainability Management Framework, which combines the values of decision makers, the sustainability objectives of the firm, and a scientific perspective to sustainability to foster sustainable development. The framework can be utilized in making sustainability-related goal setting more transparent, so that the decisions are based on the values the firm wishes to follow. The approach supports the early phase of sustainable business model innovation and facilitates the developing of value propositions that are in line with the fundamental values of the firm.