Sustainable entrepreneurs have been defined as entrepreneurs who pursue economic, social, and environmental goals simultaneously. These entrepreneurs often diverge from prevailing patterns of thinking and acting, especially because the institutional environment doesn’t usually support their initiatives.
To achieve their goals, sustainable entrepreneurs face a double challenge: they need to influence their immediate socioeconomic context and overcome institutional pressures.
But how can sustainable entrepreneurs influence their environment and overcome these pressures to drive social change? The answer lies in engaging in institutional work, according to research findings by Esade associate professor Daniel Arenas.
Sustainable entrepreneurs often diverge from prevailing patterns of thinking and acting, especially because the institutional environment doesn’t usually support their initiatives
“Institutional work refers to the efforts of individuals to cope with, support, resist, or change the institutional arrangements in which they live,” says Arenas. “Our analysis shows how sustainable entrepreneurs purposively adapt to existing formal and informal institutions while also trying to influence them to introduce their innovations and advance their sustainability efforts.”
In their findings, published in Business Strategy and the Environment, Arenas and his co-authors analyse multiple case studies involving sustainable entrepreneurship initiatives. Their conclusions reveal that sustainable entrepreneurs engage in four types of institutional work to push their social agenda forward.
1. Making sustainability convenient
The first institutional strategy sustainable entrepreneurs engage in is making sustainability convenient. “This work involves presenting their social and environmental innovations as a convenient activity, accessible to mainstream users and consumers, with the hope of exposing them to the benefits of sustainability.”
Making sustainability convenient
To make sustainability convenient, in one of the cases analysed, the Italian cooperative Retenergie designed an easy process of subscription and of switching from traditional energy providers without sacrificing service price or quality. The organisation appealed to “mainstream” consumers concerned about the price of energy, the reliability of delivery, and financial returns. In fact, one of the founders of Retenergie emphasised values such as efficiency and savings, which are typically associated with the commercial logic: “Our goal is to reduce the environmental impact of energy supplies. So, it is normal for us to work on energy efficiency, while for a producer of electricity it is not: if you produce and sell electricity, the more electricity that is consumed the better for your profits. For us this is not a problem because we don’t aim to maximise profit.”
By making sustainability convenient, sustainable entrepreneurs decrease the perceived risks of their innovations
Making sustainability accessible, easy, and attractive, the authors say, is a type of work that aims to establish a bridge between the commercial and sustainability logics, by fitting into the commercial logic, but also trying to advance sustainability goals. By making sustainability convenient, sustainable entrepreneurs decrease the perceived risks of their innovations and engage in a form of mimicry, defined as “associating new practices with existing sets of taken-for-granted practices, technologies and rules in order to ease adoption.”
2. Politicising economic action
The study shows that sustainable entrepreneurs frequently interpret and present their initiatives in a way that goes beyond the act of consuming, using, or sourcing a product or service. Sustainable entrepreneurs infuse these practices with a political meaning that surpasses mere economic transactions.
Politicising economic activity
An example of economic action with a political meaning can be found in La Ruche, the French online platform connecting local food producers and consumers organised in small “assemblies”. Its founders wanted to create awareness among customers about their contribution to the local community and the natural environment, and not just as a tool to obtain better produce. The very term “assembly” already carried a political connotation (in many countries the organisation was called “The Food Assembly”). The message transmitted was that the choice between buying food from supermarkets, which import produce from distant regions, and doing so from local producers through food assemblies had repercussions for environmental protection, justice, and community development.
“In our analysis, we suggest that by politicising economic action, sustainable entrepreneurs are changing the normative associations of a practice. Rather than simply trying to legitimise new practices and organisational forms to appeal to those who preserve and reproduce dominant institutional logics, social entrepreneurs also appeal to potential allies among social movements and activists that challenge the prevailing order,” write the authors.
3. Manoeuvring around regulations
The analysis of the cases shows that sustainable entrepreneurs adapt to existing regulations, but they also engage in the work of changing, extending or reinterpreting them to carry out their activities. “Institutional work to change and manoeuvre around regulations is a crucial task for sustainable entrepreneurs to advance their initiatives,” says Arenas.
Manoeuvring around regulations
An example of this type of institutional work can be found in the founders of Zebramobil, who made great efforts to discuss ways to manoeuvre around or change regulations on parking permits with public administrators, so that their car-sharing vehicles could use spaces in the street reserved for residents. This change, which was essential for their business model, implied giving car sharing the same status as private ownership of cars by residents of the city centre.
4. Relational work
Far from the individualistic image of the “heroic entrepreneur”, the cases analysed reveal that sustainable entrepreneurs engage with and rely on different types of individuals and organisations that facilitate access to resources and opportunities, and provide legitimacy to their initiatives.
“All of the cases maintained intense relationships with public administration representatives, which was essential because they were developing services that did not fit established regulatory categories,” says Arenas.
Relational work, when it is most effective, builds bridges between diverse stakeholders who might offer different types of invaluable support to new ventures. This type of relational work is intimately interconnected with the previously mentioned types of institutional work; for example, relational work with public officials facilitates the work of manoeuvring around regulations, and relational work with civil society organisations and activists allows engaging in the work of politicising economic action.
“Our study reveals that the combination and mutual reinforcement of these four types of externally oriented institutional work allow sustainable entrepreneurs to try to influence a logic shift toward sustainability while embedding their innovations in the market,” conclude the authors.
Article based on research by Daniel Arenas (Esade), Marta Struminska-Kutra (VID Specialized University) & Paolo Landoni (Politecnico di Torino)
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