I saw six business cases for environmental sustainability in Green to Gold.
1)It improves turnover by improving efficiency.
2)It improves revenue by creating more marketable, better designed products.
3)It is strategic in the long-term by improving brand.
4)It reduces liabilities from environmental problems.
5)It reduces the risk associated with new regulation.
6)It reduces insurance expense.
It’s a great start, six solid ways to integrate an environmental and fiscal bottom line, and all six are in one way or another dependent on outside stakeholders. Efficiency often stems from outside innovation at Universities while improved revenue and brand is largely dependent on an eco-conscious customer base. While environmental problems create intrinsic liabilities in the long term, in the short term these liabilities and the threat of legislation are the product of activist groups and government bodies, and higher insurance costs are reliant on insurers. In short, green is not gold unless there are stakeholders in the marketplace working to make it that way. Depending on how these stakeholders (especially consumers and regulatory bodies) act, the competitive environment can range from barely rewarding environmental sustainability to mandating it. One could go so far as to say that there are “conditions for sustainable competition” that must be established and protected, the same way that there are protected conditions for “free” market competition. Green to Gold allows smart companies to react to these conditions the same way that smart companies react to conditions in free (and not so free) markets.
Getting the gold is largely a process of green stakeholder engagement, and Esty and Winston provide a strong focus on this topic. My question is this: when companies ride out to engage stakeholders and claim their green gold do they improve or degrade the market conditions for sustainable competition? Will their green marketing make more eco-conscious consumers or will it make green into a fad destined to dry up and blow away? Will they allow regulatory agencies and activists to take increasingly aggressive positions or will they lobby and co-opt them to weaker and weaker positions? It seems like the former is essential. Companies that operate sustainably while undermining the conditions of a sustainable economy also undermine their own long-term strategy. To really reap the benefits companies have to not only become sustainable leaders in their industry, they have to help make sustainability the axis of leadership that matters.