“Green to Gold – How smart companies use environmental strategy to innovate, create value, and build competitive advantage”
by D.C. Esty and A.S. Winston
ISBN: 0470393742
Review by: Pamela Ravasio, @PamelaRavasio
“Green to Gold” is entirely dedicated to the single goal of motivating and helping businesses and their staff, from junior member to CEO and the board, to integrate an environmentally flavoured “What then?” afterthought into each and every of their endeavours.
Environmental impacts from business practices can be look at and tackled from 2 perspectives: mitigation and innovation.
Mitigation in this context would mean “just” cutting down on hazardous material, waste, Co2 emissions and so on, due to the cost impact that overuse, disposal, legislation directly have on operations.
Innovation goes beyond mere cost cutting, and actively searches out alternatives and opportunities that come from doing business in an environmentally sustained way. En example in this context would be 3M’s redesign of sticky notes’ glue to make it entirely water based and free of any type of green house gas. While conviction to “do the right” thing is only one variable here, an important factor is hidden risks (and also costs) that may have to be owned up to in the future.
The authors identify 4 factors that characterise an innovation approach to “Green Business Strategies” underpinning environment driven innovation:
Eco-Advantage Mindest combines the following aspects:
- Look at the forest, not the tree: Thinking broadly about time, pay-offs, and boundaries. Decisions are made with the long-term in mind, and include intangible benefits into pay-off calculations. The whole value chain, not only inner operations, is considered, from raw materials and suppliers to customers needs resp. product end-of-life.
- Start at the top: The board, and CEO and the executive committee as a whole are a prominent advocates for “green” strategies.
- No is not an answer: Only the best of all innovations that meet tough standards are good enough. If e.g. Zero-impact seems impossible to achieve – that’s the goal to head for, and nothing else. Creativity is not the least triggered when seemingly unreachable challenges have to be met.
- Feelings are facts – recognize it: What communities, NGOs and other stakeholders feel (recognize) as the facts, rather then the facts themselves, is what impacts businesses. Stakeholders of all types have to met where they stand.
- Do the right thing: Values matter – as much now as always.
Eco-Tracking: Environmental impacts and their management require a systematic approach to capturing and using good quality (hard) data, hence the need to use a tested and trialled environmental management system (EMS). Life Cycle Assessments are required to understand the bigger picture, both up as well as down stream in the value chain. Benchmarking pin points a company’s position in the global context, helps to be ahead of legal requirements and to realize competitive advantage by ‘being ahead of the crowd’.
Redesign: Environmental problems are designed out of products, processes and facilities before they arise on the planning board,and as a consequence save time, money, resources and unintended outcomes further down the road.
Culture: Environmental thinking and innovation is promoted throughout all ranks. Concretely, the following factors have found to be of importance:
- Environmental targets are being stretched: Zero Impact (and mean it) is an example. Note: Companies have found this being a challenging, but totally reachable goal.
- Decision making tools: Traditional cost-benefits analyses are refined to allow for intangibles such as staff retention or public reputation.
- Ownership and engagement: This reaches from more abstract, generic issues such as decided senior executive engagement across the board to concrete tools that require e.g. plant managers to publicly own up to the environmental impact each of their processes has, or bonus formulas that include a “green” multiplier, usually a set of specific environmental key performance metrics.
- Storytelling: Do good and talk about it. Not only to the public, but most importantly to staff across the whole company. Teach staff about benefits obtained in concrete projects, in order to keep the knowledge active and the commitment going.
“Green to Gold” contains many examples and case studies of successful environmental strategies. Importantly: it does not forget to honestly state that like all strategies and projects, also “green” ones fail have to be executed thoroughly to prevent failure.
Although the occasionally repetitive reusing of examples is slightly monotonous, over all, “Green to Gold” is a worthy, informative read with plenty of food for thought.
This book is available from your nearest book shop, or online from Amazon.
