Creating Value through Green Strategies

Posted By: Robyn Greenspan
Filed Under: world innovation forum, robyn greenspan, the economy, innovation, strategy, joel makower, green, sustainability, environment, strategic value

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"Green" is evolving from a regulatory or moral requirement to a business strategy. Companies have different drivers for adopting green initiatives, but collectively we're moving toward a third era. Joel Makower, author of Strategies for the Green Economy: Opportunities and Challenges in the New World of Business, defined these eras at the 2010 World Innovation Forum, where ExecuNet exclusively reported for attendees.

The Compliance-Driven Era: Do no harm
The Environmentalism Era: Companies can do well by doing good
The Business Value Era: Green creates value by providing better products

Green only equals good if green is better, and it shouldn't begin and end with marketing. Makower believes companies are embracing green as a platform for innovation and as a new business model. There's a "green" strategic value in business that he said can be measured in:

top-line growth
increased sales
cost reduction
attracting and retaining talent
being a preferred supplier
reputational advantage
new products and markets
improved quality

Makower outlined three types of innovation strategies, and some examples of successful implementations:

Product Innovation

Coca-Cola's PlantBottle is partially made from renewable plant-based material and is 100-percent recyclable.
Method created an 8x concentrated detergent to fit into the same size packaging.

Process Innovation

SC Johnson, through R&D, is eliminating toxins in products like Windex.
Frito-Lay is aiming for zero waste.

Business Model Innovation

Waste Management is working toward materials management.
UPS offers customers an opportunity to offset carbon produced by deliveries.

Makower poses three key questions for businesses to ask of themselves:

What do we know about what we do from an environmental perspective? Most companies think they know, but when they look, they are surprised. Take Coca Cola and ask yourself, "What is its biggest impact on the environment?" Is it water use, mining for aluminum to make cans, petroleum used in making plastic bottles, sugar cane, shipping, bottling plants and vehicle? Actually it's the Coke machines or soda fountains and the 24-hour refrigeration, coolant and insulation they require.
What's your plan — what are you going to do to resolve your answer to question 1? Coke partnered with Greenpeace on a CO₂ powered Coke machine. This all started with the question "What do we know about what we are doing?"
What are you saying? What story are you telling people about questions 1 and 2? "Everyone wants a green story to tell, but it's really hard," said Makower and, sometimes, when you point out what you're doing right, you inadvertently point out what you've been doing wrong. "Being outspoken can actually make you a target."

Strong advances in sustainable living will be driven by collaborative efforts — a technology mashup from the energy, information, communications, vehicle, building and other sectors. Essentially, emulating the progression of computing over the last 50 years where we went from a mainframe and dumb terminals to two-way conversations to wireless ubiquity.

"This innovation occurred because thousands of companies worked together, and that brought down the price of computing. Information is almost free now." Makower challenged, "How can we do that with energy?"

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Robyn Greenspan's avatar Robyn Greenspan
Robyn Greenspan is the Editor-in-Chief at ExecuNet, where she is responsible for setting and driving the editorial content engagement strategy across the private business network's publications and expert-led programming. She is also a Huffington Post blogger. You can follow her on Twitter @RobynGreenspan