HBR on Green Business Strategy
I recently bought this Harvard Business Review on amazon.com as a research insight into one of my papers for my Sustainability Management Program at Columbia University.
The particular class I took required us to come up with a Sustainability Strategy for a company of choice. It was a very hard thing to do. For a company to be successful so many factors have to align vision, ideas, cost benefit analysis (in the short-term it seldom works out in favor for going green), employee commitment, senior management support, a proper financing scheme, and last but not the least customer and investor buy-in as well. But the other side of not thinking and going green is both a failure to survive and in some cases heavy legal penalty (think BP oil disaster, Apple and Wal-Mart’s supply chain woes and etc. etc.) Luckily for those companies who do understand and do it well, they earn a bigger market share, customer loyalty and long-term investment gains as well. The Green Business Strategy covered either one of these aspects of Greening one’s business Cost and/or Benefit and below is a short description of each article taken from the Executive Summaries (why try to reword something well worded):
1. Building the Green Way by Charles Lockwood
Green construction is not simply getting more respect; it is rapidly becoming a necessity as corporations push it fully into the mainstream over the next five to ten years. According to Charles Lockwood, the owners of standard buildings face massive obsolescence. Reliable building-rating systems like the U.S. Green Building Council’s rigorous Leadership in Energy and Environmental Design (LEED) evaluate buildings and awards points in several areas, such as water efficiency and indoor environmental quality. With such tools and standards available, all companies have the opportunity to lower overhead costs, improve productivity, and strengthen the bottom line. Charles Lockwood is an environmental and real estate consultant based in Southern California and New York.
2. What every executive needs to know about Global Warming by Kimberly O’Neil Packard and Forest L. Reinhardt
Global warming is beginning to assume a prominent position on the agenda of business executives. If politicians and the public know what’s right, there will be new regulation designed to curb climate change. Yes, change will be hard but no business can hope and wish the problem away. The best way to start is to look at the risks and the inevitable opportunities associated with shifts in the weather and potential regulatory changes. Companies that calculate the risks and opportunities effectively as they would for any other part of the business will be able to make wise investments that allow them to survive the coming storms.
3. A road Map for Natural Capitalism by Amory B. Lovins, L. Hunter Lovins, and Paul Hawkens.
The premise of this article is that no one would run a business without accounting for its capital outflows. Yet most companies overlook the value of the earth’s ecosystem services. The approach of valuing earth’s provide services (also known as ecosystem services) is called natural capitalism. To properly value it would involve first dramatically increasing productivity of currently used natural resources. Stage 2 would be to adapt close looped production systems that would yield no waste or toxicity. The third stage requires a change of business model from selling products to delivering services. Final stage would involve reinvesting in natural capital to restore, sustain, and expand the planet’s natural resources. Most companies are just now trying to cash in and perform stage 1. There is so much benefit and learning to be gained from completing the other stages.
4. Beyond Greening Strategies for a Sustainable World by Stuart Hart
Hart says, ” When greening becomes part of the corporate strategy, opportunities of potentially staggering proportions open up.” He identifies three stages of environmental strategy: Pollution Prevention (aka P2), Product Stewardship, and the development of clean technology. But to do so, companies first need to draw a road map that can show them how new products and services must evolve and what competencies they will need.
5. Competitive Advantage on a warming planet by Jonathan Lash and Fred Wellington
The article offers a systematic approach to mapping and responding to climate change risks. According to the authors, the risks can be divided into six categories: Regulatory(future policies such as emission standards), Products and technology (such as development and marketing of climate friendly products and services), Litigation(lawsuits alleging environmental harm), Reputational (how a company’s environmental policies affect its brand), Supply Chain (potentially higher raw materials and costs), and Physical (such as an incidence in the incidence and ferocity of hurricanes). They go on to propose a four step process to respond to this risk: 1. Quantify your company’s carbon foot print. 2. Identify risks and opportunities. 3. Adapt your business in response and 4. Do it better than your competitors.
Overall, all the articles were very well written, practical and even after 7 years of publication quite relevant.