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Sustainability risk and portfolio management—A strategic scenario method for sustainable product development

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  • Carolina Villamil
  • Jesko Schulte
  • Sophie Hallstedt

Abstract

Companies need to strategically develop their portfolio and find the balance between being proactive and passive in relation to sustainability. In this study, a strategic perspective based on backcasting from overarching socio‐ecological sustainability principles was used as a lens to understand how companies might adapt their product portfolios to avoid threats and exploit opportunities on increasingly sustainability‐driven markets. The study shows that sustainability performance, market success, and time are key areas to be considered in the product portfolio process to ensure short‐term profitability and long‐term competitiveness. A novel method was developed and tested in one academic group and two companies to explore how such a strategic sustainability perspective can support the product portfolio process in practice. The results indicate that the strategic layered double‐flow scenario method, including different time horizons, was supportive in identifying opportunities and avoid risks in the sustainable development process at the company.

Suggested Citation

  • Carolina Villamil & Jesko Schulte & Sophie Hallstedt, 2022. "Sustainability risk and portfolio management—A strategic scenario method for sustainable product development," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 1042-1057, March.
    • Handle: RePEc:bla:bstrat:v:31:y:2022:i:3:p:1042-1057
    DOI: 10.1002/bse.2934
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