Systems thinking for organisational sustainability

1. The challenge of organisational sustainability

Organisational sustainability involves integrating social, environmental, and economic considerations into core business practices. This holistic approach enhances long-term resilience, reduces operational risks, and strengthens stakeholder relationships, while contributing to a thriving economy and society within the limits of our planet.

The pursuit of genuine sustainability remains a critical challenge for both private and public sector organisations. These entities operate within complex sociotechnical systems and their goals generally differ - privates often are set-up to prioritise profit maximisation while public sector bodies aim to deliver essential services or achieve public good objectives. However, both sectors face similar challenges in integrating sustainability beyond a superficial level.

For the private sector, prioritising short-term profits over long-term investments in sustainable practices can lead to environmental degradation, resource depletion, and ultimately, harm to their own long-term viability. Public sector bodies may face similar pressures, prioritising immediate cost savings over investments in sustainable infrastructure and practices that could yield long-term benefits. Additionally, a lack of clear sustainability goals or metrics can hinder progress in both sectors, making it difficult to measure progress and hold organisations accountable for their environmental and social impacts.

The complexities and interconnected web of a global supply chain presents another robust challenge . Private sector companies may struggle to track and manage the environmental and social footprint of their products and services across a vast network of suppliers. Public sector bodies may rely on private contractors for construction, maintenance, or other services, inheriting the environmental and social impacts embedded within those supply chains. Fragmented communication and a lack of collaboration with suppliers can make it difficult for both sectors to ensure sustainable practices throughout the entire lifecycle of operations, projects, schemes and initiatives.

The current state of private and public sector sustainability can also be characterised by a disconnect between stated goals and real-world outcomes. Both sectors may publish ambitious sustainability reports while their day-to-day operations continue to be environmentally and socially detrimental . This performative approach to sustainability can erode stakeholder, and workforce, trust and hinder progress towards a more sustainable future.

A paradigm shift is necessary, moving towards a comprehensive approach that considers the long-term social and environmental implications of decisions across the entire value chain for organisations. This requires acknowledging the interconnectedness of the sociotechnical systems within which they operate, integrating sustainability considerations into core business or planning processes, making sustainability the foundation of the organisational operating model, and fostering collaboration with all stakeholders within the supply chain.

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2. What is Systems Thinking?

Systems thinking is a powerful tool for tackling complex challenges. The concept recognises that real-world systems are made up of interconnected parts that cannot be fully understood in isolation. By mapping these connections and understanding how they interact, we can gain valuable insights into how systems behave and identify leverage points for change.

The concept stands in contrast to a reductionist approach, which focuses on breaking down a system into its individual parts and studying them in isolation.

?Key principles of systems thinking include:

• Wholes are greater than the sum of their parts – a system exhibits properties that are not inherent to any individual component. For example, the ability of an ecosystem to thrive is an emergent property arising from the complex interactions of various plant and animal species. And a railway infrastructure network is not simply a collection of individual components like tracks, signals, and stations, these components function in a complex and interconnected manner to create emergent properties, principally network capacity, network efficiency, and network resilience.
• Feedback loops - actions within a system can have unintended consequences that circle back and influence the original action. These feedback loops can be reinforcing (amplifying an effect) or balancing (counteracting an effect). For example, large scale clearance of hedgerow to increase land for agriculture or infrastructure has led to a decrease in biodiversity. This decline can have a negative impact on natural pest control, as insectivores (like birds and hedgehogs) play a crucial role in keeping insect populations in check. An increase in insect pests can then necessitate the use of more pesticides, which can further harm remaining insect populations and potentially harm other wildlife through unintended consequences. This creates a reinforcing feedback loop that can lead to a decline in overall ecosystem health.
• Boundaries and open systems - systems thinking recognises that systems have boundaries, but also acknowledges that most systems are open, meaning they interact with and are influenced by their environment. So, the railway infrastructure manager interacts with a complex web of external factors beyond the tracks, stations, and signals directly managed. These external factors, such as passenger needs, industry regulations, land development, and environmental considerations, significantly influence how the network functions and evolves.
• Understanding system dynamics - systems thinking goes beyond simply identifying the components of a system. The concept includes the dynamics of the system, the patterns of behaviour and change within the system over time. Causal loop diagrams, a popular tool in systems thinking, can help visualise these dynamics by depicting the relationships between variables and the direction of their influence (positive or negative) (see section 4).

By leveraging these core principles, organisations can tackle complex problems more effectively, make informed decisions that account for unintended consequences, and foster collaboration to achieve sustainable solutions.

3. How can Systems Thinking help address the complexity of the sustainability challenge?

By applying systems thinking principles, we can gain a deeper understanding of the sustainability challenge. We can also consider systems thinking as a process that ensures a clear understanding of the outcomes required and systematically coordinates activities to deliver these outcomes.

One core tenet of systems thinking is the focus on dynamic relationships between elements within a system. This transcends isolated cause-and-effect analyses, revealing how seemingly independent choices or actions can have cascading effects on the broader system, both positive and negative. A decision to implement sustainable practices throughout railway infrastructure lifecycle (design, production, construction, operation, maintenance, and end-of-life) necessitates re-evaluating not only engineering choices but also data management processes to ensure traceability and accountability. For example, a decision to reduce material usage in track renewals (an engineering decision) might necessitate stricter quality control measures (environmental impact) and increased supply chain transparency (data management), creating a ripple effect throughout the system.

Systems thinking sheds light on feedback loops, where a system's outputs can become inputs, influencing the original action. These loops can be reinforcing, amplifying an effect, or balancing, counteracting an effect. Recognising these feedback loops is crucial for informed decision-making. For example, investments in renewable energy infrastructure (action) might lead to lower greenhouse gas emissions (positive effect), potentially leading to increased societal acceptance of renewable energy (reinforcing loop). However, this acceptance could also lead to complacency and a slowdown in further innovation (balancing loop). By identifying and understanding these feedback loops, we can make decisions that harness positive reinforcements and mitigate negative ones.

Systems thinking also acknowledges that systems have boundaries, but also recognises that most systems are open, meaning they interact with and are influenced by their environment. This concept emphasises the importance of life cycle analysis in understanding a product or initiative environmental impact throughout its entire life cycle. An organisation's sustainability efforts, for instance, are not solely dependent on its internal practices but are also influenced by factors like government regulations, customer behaviour, and the sustainability practices of the supply chain. By recognising the open nature of systems, we can extend our focus beyond immediate actions and consider the broader context in which those actions occur. This allows for the development of more comprehensive and adaptable sustainability strategies.

Furthermore, systems thinking fosters a holistic view, encouraging us to consider all relevant factors when devising solutions. This approach helps us avoid unintended consequences and develop solutions that address the root causes of sustainability challenges. For example, promoting sustainable agriculture goes beyond just changing farming practices , and might also require tackling issues like water scarcity, soil health, and market access for small-scale farmers, creating a more comprehensive and sustainable solution. A systems thinking approach compels us to move from isolated solutions to interconnected strategies that consider the entire system and its various stakeholders.

By fostering a long-term perspective, systems thinking encourages businesses to consider the long-term consequences of their decisions, ensuring long-term environmental and social well-being alongside economic viability. Short-term gains are balanced against potential future consequences - a company might choose a more expensive but sustainable material for its products, understanding that this choice can minimise environmental damage and potentially enhance reputation in the long run; this can also lead to cost savings over the long term, as companies avoid the potential for regulatory fines or remediation costs associated with unsustainable practices.

Finally, systems thinking facilitates collaboration among diverse stakeholders within the supply chain, including raw material suppliers, manufacturers, distributors, and customers, encouraging the sharing of best practices, joint problem-solving, and the co-creation of innovative solutions to complex sustainability challenges. By working together, stakeholders can address issues from multiple angles, leading to more comprehensive and effective sustainability strategies. For example, a clothing company might collaborate with cotton farmers to develop more sustainable farming practices that reduce water usage and improve soil health. This collaboration can benefit all stakeholders -the company can reduce its environmental footprint, farmers can improve their yields and profitability, and consumers can have access to more sustainable clothing options.

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4. Methodologies and Tools in Systems Thinking for sustainability

Life Cycle Assessment (LCA) serves as a cornerstone methodology for integrating sustainability into projects. Defined by the International Organization for Standardization (ISO) 14040 and 14044 standards , LCA offers a comprehensive framework for assessing the environmental impact of a product, service, or system throughout its entire lifecycle. Beyond its core environmental focus, LCA can be expanded to encompass broader sustainability dimensions. Social Life Cycle Assessment (S-LCA) integrates social aspects like labour practices and human rights violations, while Life Cycle Costing (LCC) incorporates economic considerations throughout the lifecycle. This multi-dimensional approach resonates with the concept of ‘sustainability as a quality’, emphasising the need to assess sustainability across environmental, social, and economic spheres.

LCA provides a robust foundation, to which a diverse systems thinking toolkit can be applied to address the multifaceted nature of sustainability challenges.

Tools for defining, modelling, and simulating systems include:

• Causal Loop Diagrams - map the causal relationships between different elements within a system. They help to identify feedback loops, both positive and negative, that can have a significant impact on the system's behaviour. For example, a CLD could be used to map the causal relationships between water resource management practices, agricultural irrigation, and ecological health within a river catchment. Identifying these feedback loops allows for the development of more sustainable water management strategies that consider both human needs and ecological wellbeing.

• Stock and Flow Diagrams - depict the accumulation and movement of resources or materials within a system over time. They are particularly useful for understanding the dynamics of complex systems with feedback loops, for example the dynamics of a fishery, considering factors such as fish population, fishing pressure, and potential impacts of climate change on ocean ecosystems. This allows for a more nuanced understanding of how various factors interact and influence the sustainability of fish stocks.

• System Dynamics Modelling - utilises computer simulations to model the behaviour of complex systems over time. By incorporating feedback loops, delays, and nonlinearities, system dynamics models allow for scenario planning and the evaluation of potential interventions' impact on sustainability outcomes.
• System Archetypes - are recurring patterns of behaviour observed in various systems. Identifying relevant archetypes within a sustainability challenge can inform intervention strategies. As an example, the ‘limits to growth’ archetype might be applicable to a situation where a growing urban population places increasing pressure on water resources. Understanding this archetype can inform strategies for promoting water conservation, exploring alternative water sources, and improving infrastructure efficiency.

• ?Agent-Based Modelling - focuses on individual entities (agents) and their interactions within a system, allowing for the exploration of emergent properties arising from these interactions, providing valuable insights into complex socio-ecological systems relevant to sustainability challenges.

• Architectural Definition Tools - create system architecture diagrams that consider environmental and social aspects alongside technical ones. By visually depicting the interconnectedness of these elements, architects can design systems that are not only functional but also sustainable in the long term. For example, these tools can be used to map the life cycle of a product, highlighting resource flows and potential environmental impacts at each stage. This information can then be used to identify opportunities for eco-design and resource optimisation

Then, for implementation and integration:

• Backcasting - starts with a desired future state related to sustainability and then works backward to identify the necessary steps and policies to achieve the end state. Backcasting encourages a goal-oriented mindset and facilitates the exploration of innovative solutions within a systems perspective.
• Multi-Criteria Decision Analysis - incorporates both quantitative and qualitative criteria to evaluate and compare sustainability initiatives. MCDA allows stakeholders with diverse priorities to contribute to decision-making through weighting different factors based on their importance.
• Weighted Score Analysis - assigns scores and weights to different criteria relevant to a sustainability decision. This facilitates a structured comparison of alternatives and helps to prioritise options based on a pre-defined set of values. While this tool may not capture the full complexity of sustainability decisions, WSA offers a practical approach for initial evaluation, particularly when dealing with limited data or resources.
• Cost Benefit Analysis - estimates the costs and benefits of an option in financial terms. CBA can be a valuable tool for understanding the economic viability of a sustainability initiative and assessing its potential return on investment. However, it is important to acknowledge that some sustainability benefits, such as environmental improvements or social wellbeing, may be difficult to quantify financially. In these cases, complementary valuation techniques or incorporating qualitative factors alongside economic ones can be helpful.
• Multi-Stakeholder Dialogues - create a platform for open communication and shared understanding among various stakeholders within a system's boundaries. Infrastructure managers can benefit from this methodology, which might involve bringing together engineers, ecological, environmental and social value experts, community representatives, and government agencies. Through transparent communication and data sharing, these stakeholders collaboratively develop solutions that address sustainability concerns while meeting infrastructure needs and protecting ecological integrity. For example, MSDs can facilitate discussions on mitigation strategies to minimise habitat disruption during railway construction and maintenance, such as implementing wildlife corridors or adopting pollution reduction technologies.

And going on to maintenance and operation:

• Failure Modes and Effects Analysis: traditionally used to identify potential failures within a system and their impact on functionality, but can also be adapted for sustainability purposes. By considering environmental and social factors alongside technical ones, FMEA can help to identify potential sustainability risks associated with a system's operation. For example, an FMEA might analyse the potential environmental impact of a physical asset failure, such as a hazardous substance leak. This information can then be used to develop mitigation strategies and improve the overall sustainability of the system.
• Circular Economy Frameworks: encourage the transition from a linear ‘take-make-dispose’ model to a closed-loop system where resources are kept in use for as long as possible. By applying these frameworks, waste can be minimised and resource use optimised. Circular economy principles should, of course, be implemented at various stages, from design to end-of-life management.

And finally, to close the loop, the stage of disposal. Systems thinking promotes strategies that minimise waste generation and extend the lifespan of materials:

• Design for Disposal: prioritises the ease of dismantling products at their end-of-life. By incorporating features like modular components and standardised components, disassembly becomes less time-consuming and labour-intensive, facilitating the recovery of valuable parts for reuse or high-quality recycling, minimising the amount of material going to disposal.
• Industrial Ecology Frameworks: borrowing from nature's closed-loop systems, these tools encourage waste to be viewed as a potential resource. By-product synergy identifies opportunities for one sectors waste to become valuable input for another. For instance, scrap metal from a infrastructure process could be used as raw material for a different company. Cascading utilises materials for their highest-value purpose first, then reuses or recycles them down a cascade of less demanding applications before final disposal. Such an approach extends the productive life of materials and reduces the need for virgin resources.

All these tools complement LCA by providing a deeper understanding of the system's internal dynamics and fostering a more holistic perspective on sustainability challenges.

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?5. Implementing Systems Thinking for sustainability

Having explored the core principles of systems thinking, and how these can be applied to gain a deeper understanding of sustainability challenges, the need is to move to implementation. So, how do we go about integrating sustainability into the core of an organisation. The following sets out a logical, indicative, process:

Step 1. Establishing a baseline for sustainability performance

The initial stage involves a thorough assessment of the organisation's current sustainability practices. The need is to identify potential challenges specific to the organisation's sector and context and also key areas for improvement. This means critically reviewing existing Sustainability Policies, evaluating available sustainability performance indicators, and gathering information on stakeholder concerns regarding the organisation's environmental and social impact.

Step 2. Building cross-functional systems thinking teams

Teams should be composed of individuals with diverse expertise, breaking down traditional organisational silos. Drawing on the principles of transdisciplinarity, team members should possess strong competencies in:

• Sustainability frameworks - life cycle assessment (LCA),?circular economy principles, social impact assessment, etc.
• Data analysis and interpretation - to leverage big data for sustainability purposes.?This aligns with the growing emphasis on data-driven decision-making in the field of sustainability.?The United Nations report, ‘Big Data for Sustainable Development ’, highlights the potential of big data in areas like resource management, climate change mitigation, and disaster risk reduction. The team should be able to extract meaningful insights from data sets to inform decision-making and track progress towards sustainability goals.
• Organisational knowledge:?to ensure that systems thinking models are grounded in the real-world context and address the organisations specific sustainability concerns.

?Step 3. Data analysis and insight generation

Drawing on the principles of data-driven sustainability, the Systems Thinking team could collaborate with data scientists to:

• Identify and analyse data sets - such as energy consumption data from facilities and throughout the supply chain,?customer surveys regarding sustainability preferences,?and sensor data generated by Internet of Things (IoT) applications.?This data provides valuable insights into the organisation's sustainability footprint and stakeholder sustainability priorities.
• Translate data into insights:?this may involve data visualisation techniques and statistical analysis to identify trends and patterns that would otherwise be difficult to discern. Artificial Intelligence is expected to transform our capability in this space, and the Systems Thinking team are likely to extract considerable value by engaging with specialists in this extremely fast-evolving field

Step 4. Stakeholder engagement and value chain analysis

Engaging stakeholders, throughout the value chain, allows for identification of sustainability as a quality of the intended system to be realised. Stakeholder workshops and discussions can be facilitated using systems thinking tools to identify potential tensions between different aspects of the system and uncover shared sustainability priorities.

Stakeholder engagement theories, such as stakeholder salience theory , can inform the process of identifying relevant stakeholders and tailoring engagement strategies. For example, a workshop might involve representatives from various functions within the organisation (e.g., operations, engineering, procurement) alongside suppliers and customer groups. By working together and visualising the organisation's entire value chain through systems thinking tools, stakeholders can identify areas where sustainability improvements can be made collaboratively. This fosters a sense of shared ownership and ensures that sustainability efforts are aligned with stakeholder expectations.

Step 5. Tailoring systems thinking tools

As set out in section 4, systems thinking offers a variety of tools to model and understand complex systems. These tools should be customised to address the specific challenges identified during the initial assessment and stakeholder engagement processes. For example, Causal Loop Diagrams can be enhanced by integrating data on resource use,?emissions,?and social impacts obtained through big data analysis.?This allows for a more quantitative understanding of the system's behaviour and the potential effects of interventions - a CLD might depict the relationship between energy consumption in operations processes,?greenhouse gas emissions,?and stakeholder preferences for eco-friendly products.?By overlaying data on energy use and customer sustainability concerns,?the systems team can identify opportunities for reducing energy consumption while maintaining customer satisfaction.

Step 6. Communication and collaboration

Open communication and data transparency are fundamental to fostering trust and collaboration among stakeholders. Sharing sustainability data openly with stakeholders allows them to make informed decisions that align with the organisation's sustainability goals. This can involve regular sustainability reports, transparent communication about sustainability performance, and collaborative goal setting with stakeholders.

Step 7. Optimising decision-making

Following the identification of key challenges and tailored systems thinking tools, a key step involves integrating sustainability considerations into the organisation's core decision-making processes. This ensures that environmental, social, and economic factors are all considered when making strategic choices. Key strategies for achieving this include:

• Sustainability criteria in functional and initiative evaluation -?development of sustainability criteria that can be used to evaluate the environmental and social implications of operations, projects and investments.?This ensures that sustainability considerations are not an afterthought but are embedded within the decision-making process from the outset.
• Scenario planning for sustainability - utilise scenario planning techniques to explore potential future sustainability challenges and opportunities.?This allows the organisation to develop contingency plans and make strategic decisions that are robust in the face of uncertainty. This strategy is common in climate change adaptation challenges , for example.

Step 8. Continuous learning and adaptation

A culture of continuous learning and adaptation is essential for long-term success. As new data becomes available, organisations should update their systems thinking models and tools, such as LCAs and CLDs, to ensure they reflect the most current understanding of the system and its dynamics. This iterative process allows organisations to continually refine their sustainability strategies and track progress towards long-term sustainability outcomes.

Importantly, systems thinking allows for the core operating model of an organisation to be redesigned. The process fosters a holistic perspective by examining the interconnectedness of various elements within the organisation and its ecosystem.? This enables the redefinition of core aspects like purpose, vision, and strategic objectives to explicitly include sustainability goals. Organisational silos can be broken down through cross-functional teams and stakeholder collaboration, ensuring everyone is working towards the same goals. Sustainability ownership is established throughout the organisation by assigning clear metrics to leadership and integrating them into individual roles. Decision-making processes are further strengthened by incorporating sustainability criteria and establishing dedicated governance structures. Finally, a balanced set of performance indicators that measure progress on economic, social, and environmental aspects provides a comprehensive picture of the organisation's sustainability performance.? By continuously analysing, adapting, and improving these interconnected elements, organisations can achieve a truly integrated and sustainable operating model.

Wrapping-up

We stand at a critical juncture in history. The urgency of addressing sustainability challenges demands a transformative approach. Business as usual is no longer an option . The path towards organisational sustainability requires a paradigm shift beyond traditional, siloed approaches. Yet only a tiny fraction of the vast organisational ecosystem of the world has substantially achieved such a shift .

Systems thinking offers a powerful framework for organisations to integrate environmental, social, and economic considerations into core operations and decision-making.

The future holds the promise of moving beyond simply mitigating negative impacts and striving for a regenerative approach to sustainability, continuously improving the health and wellbeing of the social and ecological systems within which businesses operate.? Systems thinking, coupled with big data analytics, empowers organisations to identify opportunities to restore and regenerate all the types of capital that come into play - Natural, Human, Social, Intellectual and Financial?- throughout the lifecycle of their operations, products and services.

Views in this article represent the author’s personal opinions only.