Why sustainability goals can lead to conflicting strategies

Forests absorb carbon dioxide, support biodiversity, and provide renewable materials that can replace fossil-based products. But how should we balance these benefits? And what happens when stakeholders agree that sustainability matters but disagree on how to achieve it?

A new study co-authored by Associate Professor Kaisa Koskela-Huotari and Professor Suvi Nenonen, both at the Stockholm School of Economics and affiliated with the Business Models and Innovation Platform at the House of Sustainable Society, examines how different stakeholders seek to shape markets connected to forest-based resources.

The researchers studied four markets in Sweden and Finland: forest management services, residential multistory construction, district heating generation, and carbon credits. Their analysis draws on interviews with 100 people as well as policy documents, reports, and news coverage.

“Sustainability means different things to different stakeholders,” says Kaisa Koskela-Huotari. “Our research shows that even when businesses, policymakers, and environmental organizations agree on the importance of sustainability, they can have fundamentally different ideas about what needs to change.”

Why stakeholders choose different strategies

The researchers identify four ways in which established businesses and those challenging existing markets enact sustainability in their strategies.

For those challenging existing markets, the key question is whether they believe the market can become sustainable.

When challengers see opportunities to improve existing practices, they tend to push for reforms. In forestry, this could mean advocating alternatives to clear-cutting, such as continuous cover forestry. But when challengers believe an activity is fundamentally incompatible with their environmental goals, they are more likely to argue that the market itself needs to shrink. For example, in the construction industry, some architects advocated for renovating existing buildings instead of constructing new ones.

For established businesses, the key question is how they interpret the gap between their sustainability performance and challengers' expectations.

When businesses believe challengers’ criticism stems from misunderstandings or incomplete information, they tend to defend existing practices. In forestry, for example, industry players may emphasize how wood-based products help replace fossil-based materials.

But when businesses recognize that their current practices fall short of sustainability expectations, they are more likely to support reforms, including new regulations or changes to how their markets operate.

“Disagreements about sustainability aren't always about the facts. They can also reflect different beliefs about what is acceptable and what kind of future we should aim for,” says Suvi Nenonen. “Understanding these differences is an important first step toward finding solutions that different stakeholders can support.”

What the findings mean for sustainable markets

The findings help explain when businesses should rethink their practices, when challengers can push for reform, and how policymakers can support market change.

For established businesses, understanding the reasons behind sustainability pressures is essential. Better communication may help when disagreements concern facts, but when expectations have fundamentally changed, businesses may need to rethink their practices or business models.

For companies challenging existing markets, offering a greener product is rarely enough. They also need to understand the wider market and work with other stakeholders to change established practices.

For policymakers, the study highlights the importance of looking beyond individual products and considering the wider rules and practices that shape markets.

Regulators also need to recognize that established businesses wanting to protect existing practices often have greater resources and lobbying power to influence sustainability-related regulation. As a result, public consultations may disproportionately reflect the views of those opposing change, while smaller companies or environmental organizations may lack the resources or awareness to participate.

For environmental organizations, the findings suggest that they can accelerate progress toward sustainability by working alongside reform-oriented stakeholders while maintaining pressure for more ambitious change.

Agreeing on sustainability goals is only the beginning. The harder question is what needs to change, and who is willing to change it. By understanding what drives different approaches to sustainability, businesses, policymakers, and environmental organizations can better navigate competing interests and work toward meaningful changes in how markets operate.

Research details

“Multi-stakeholder market shaping for sustainability: effort types and enactment pathways in B2B markets” published in Journal of the Academy of Marketing Science.

Authors:

• Kaisa Koskela-Huotari, Department of Marketing and Strategy, Stockholm School of Economics. Also affiliated with the House of Sustainable Society and the Center for Philosophies of Markets, and Director of the Center for Marketing Studies.
• Suvi Nenonen, Department of Marketing and Strategy and House of Sustainable Society, Stockholm School of Economics.
• Chelsey Jo Huisman, Stockholm School of Economics and The Forestry Research Institute of Sweden (Skogforsk).
• Hans Kjellberg, Department of Marketing and Strategy and Center for Philosophies of Markets, Stockholm School of Economics.