Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage

383 Pages·2006·2.58 MB·English

by  Director Daniel C. Esty

Green to Gold

Green to Gold
How Smart Companies Use Environmental
Strategy to Innovate, Create Value, and
Build Competitive Advantage
Daniel C. Esty and Andrew S. Winston
Yale University Press
New Haven and London
Copyright(cid:2)2006byDanielC.EstyandAndrewS.Winston.
Allrightsreserved.
Thisbookmaynotbereproduced,inwholeorinpart,includingillustra-
tions,inanyform(beyondthatcopyingpermittedbySections107and
108oftheU.S.CopyrightLawandexceptbyreviewersforthepublic
press),withoutwrittenpermissionfromthepublishers.
SetinAdobeGaramondwithStoneSansDisplaybyWestchesterBook
Services.
PrintedintheUnitedStatesofAmerica.
LibraryofCongressCataloging-in-PublicationData
Esty,DanielC.
Greentogold:howsmartcompaniesuseenvironmentalstrategyto
innovate,createvalue,andbuildcompetitiveadvantage/DanielC.Esty
andAndrewS.Winston.
p.cm.
Includesbibliographicalreferencesandindex.
ISBN–13:978–0–300–11997–8(cloth:alk.paper)
ISBN–10:0–300–11997–6(cloth:alk.paper)
1. Industrialmanagement—Environmentalaspects. 2. Corporations—
Environmentalaspects. 3. Businessenterprises—Environmental
aspects. I. Winston,AndrewS. II. Title.
HD30.255.E882006
658.4'083—dc22 2006022012
AcataloguerecordforthisbookisavailablefromtheBritishLibrary.
Thisbookwasprintedwithsoy-basedinkonacid-freerecycledpaper
thatcontains100%postconsumerfiber.Thecasewasmanufacturedus-
ingacid-freerecycledpaperthatcontainspostconsumerpulps.
Thecarbondioxideemissionsassociatedwiththepublicationanddistri-
butionofthisbookhavebeenoffsetbythepurchaseofcarboncredits.
15 14 13 12 11 10 9
Acknowledgments
We were granted remarkable access to top officialsindozens
ofcompanies.Weareprofoundlygratefulforthemanyhours
environmental professionals, factory managers, division
heads, Board Members, COOs, andCEOs spentwithus.We
also interviewed people workingcloselywithindustryatma-
jor environmental groups. In total, we spoke to more than
300 people at more than 100 companies.
We can’t thank individually all the executives who shared
with us their environmental challenges and triumphs with
impressive candor and humor. But we do want to single out
a few people who really went beyond the call of duty and
clearedapathforus.Theyarrangedextensivecompanyvisits
for us, gave us access to all levels of the company, ensured
that we got into “the trenches,” and often sat through mul-
tiple days of meetings listening to stories they knew already.
Inthisregard,wethankKeithMillerandKathyReedat3M,
Shaye Hokinson at AMD, Chris Mottershead at BP, PatNa-
than at Dell, Dawn Rittenhouse and Paul Tebo at DuPont,
ix
For our children—Sarah, Thomas, and Jonathan (the Estys), and
Joshua and Jacob (theWinstons).
Wehopeyouwillbethebeneficiariesofafuturewherebusinessesboth
profit and help to createa healthy and sustainable world.
v

Contents
Acknowledgments, ix
Preface, xiii
Introduction: The Environmental Lens, 1
Part One. Preparing for a New World
1 Eco-Advantage, 7
Issues and opportunitiesfor business in an environmentally
sensitive world
2 Natural Drivers of the Green Wave, 30
Environmentalproblems and how they shape markets
3 Who’s Behind the Green Wave? 65
Stakeholdersand the power they wield
Part Two. Strategies for Building Eco-Advantage
4 Managing the Downside, 105
Green-to-GoldPlays to reducecost and risk
viii Contents
5 Building the Upside, 122
Green-to-GoldPlays to drive revenuesand createintangible value
Part Three. What WaveRiders Do
6 The Eco-Advantage Mindset, 145
Looking through an environmentallens
7 Eco-Tracking, 166
Understandingyour company’s environmental“footprint”
8 Redesigning Your World, 195
Designing for the environmentand “greening” the supply chain
9 Inspiring an Eco-Advantage Culture, 206
Creating an organizational focus on environmentalstewardship
Part Four. Putting It All Together
10 Why Environmental Initiatives Fail, 237
Pitfalls to avoid on the way to Eco-Advantage
11 Taking Action, 262
Executionfor sustained competitiveadvantage
12 Eco-Advantage Strategy, 283
Key Eco-Advantageplays, tools, and plans
Appendix 1: Additional Resources, 307
Appendix 2: Methodological Overview, 311
Appendix 3: Most Relevant Tools for Each
Green-to-Gold Play, 317
Notes,* 321
Index, 349
* References are not noted in the text but are shown by page
number and key words beginning after the appendices.