Table Of Content“I have been working and publishing on the topic of sustainability
since the 1960s and it is always a pleasant surprise to learn some-
thing new. Orsato’s book is such a surprise. It not only provides a
well-grounded analysis of the rationale for more sustainable business
models, but also provides fascinating stories about people and firms
thathavemadetheattempt,somesuccessfully,somenot.”
—RobertAyres,EmeritusProfessor,INSEAD
“Itisrefreshingtofindabookwithanacademicfoundationthatiseasy
toreadandprovidespracticalmanagementinsight.Thisisparticularly
significant when dealing with sustainability; a topic that frequently
generates more heat than light. Dr Orsato, in Sustainability Strategies,
recognises the competitive marketplace, and applies rational business
decisionmodelstomeetthechallengeoftranslatingsustainabilityinto
successful business strategy. Using his detailed studies of businesses
from around the globe he explores the successes and failures of firms
embarking along green paths. Insightful questions are posed allowing
managerstogettotheheartofenvironmentalstrategyandcompetitive
advantage,avoidingthepitfallsofseductionbyfeel-goodfactors.”
—RichardChristie,GeneralManager,StrategicDevelopment,
RavensdownFertiliserCo-op,NewZealand
“Inthelongterm,allbusinessesmustliveinharmonywiththeirenvi-
ronments, but how to do so has long been the subject of anecdotal
feel-good stories rather than real analysis. This book provides useful
models, strategies and examples for charting a sustainable course into
thefuture.”
—FransCornelis,ManagingDirector,GroupMarketing&
Communications,RandstadHolding,Holland
“Does it pay to invest in IT? Yes, but only if one combines the invest-
mentwithupgradingpeopleandorganizationalcapabilitiesandifone
links the investment to innovation. Does it pay to be green? Yes, but
again, only if this investment is linked to upgrading capabilities and
to innovative business models. That is what this long overdue book
shows through a set of convincing case examples put in the frame-
work of value innovation. Being green pays and this book tells the
readerhowtogoaboutmakinggreeninvestmentsprofitable.”
—LukVanWassenhove,HenryFordProfessorofManufacturing,and
AcademicDirectoroftheINSEADSocialInnovationCentre
“We now know that we cannot interpret history without a bet-
ter understanding of ecology. We truly do impact on a resource-
constrained world and face major issues. This very worthwhile book
isformanagersandacademics,businessleadersandspecialists.Itlinks
keyenvironmentalissuesandchoicestohard-nosedmattersofstrategy
and competitiveness. It breaks new ground with excellent, insightful
examplesfromdifferentindustriesandaveryrealisticapproach.”
—AnthonySimon,formerPresidentofMarketing,
Unilever;memberoftheBoardofIIIEE,Lund
UniversityandofINSEAD’sAlumni
“These days we all profess to support sustainability, and many organi-
zationswant‘todotherightthing’.Buthowcanmanagersmakedeci-
sionstoguidethemthroughthemazeofoptionsforeco-investments,
stayfocusedandbecomegreener?Theycanreadthistimelybook!”
—StewartClegg,ProfessorofManagementandResearchDirector
oftheCentreforManagementandOrganizationStudies,
UniversityofTechnology,Sydney,Australia
“Orsato’s global background provides a sweeping view of the many
types of successful sustainability strategies firms have employed
around the world. Each chapter focuses on one of Orsato’s sustain-
ability strategies, and each strategy comes with a useful checklist of
questionsmanagersneedtoaddressbeforepursuingit.”
—CharlesJ.Corbett,ProfessorofOperationsManagementand
EnvironmentalManagement,UCLAAnderson
SchoolofManagement,LosAngeles,US
“As we confront climate change and move toward the low-carbon
economy, this book will be an invaluable guide for executives who
seek to align environmental and social investments with the strategy
oftheenterprise.Orsatohastakenahighlystrategicapproachandcre-
ated a systematic, theoretically based but practical guide as to where
to make investments for sustainability strategy which will both ben-
efit the planet and enhance competitiveness. The argument is clearly
laidout,logicallydevelopedandpresentedinclear,accessibleEnglish.
I recommend it highly for reading by both executives and students in
MBAstrategycourses.”
—DexterDunphy,VisitingProfessor,UniversityofTechnology,Sydney,
Australia
SUSTAINABILITY STRATEGIES
INSEADBusinessPressSeries
J.FrankBrown
THEGLOBALBUSINESSLEADER
PracticalAdviceforSuccessinaTransculturalMarketplace
LourdesCasanova
GLOBALLATINAS
LatinAmerica’sEmergingMultinationals
DavidFubini,ColinPrice&MaurizioZollo;
MERGERS
Leadership,PerformanceandCorporateHealth
ManfredKetsdeVries,KonstantinKorotov&Elizabeth
Florent-Treacy
COACHANDCOUCH
ThePsychologyofMakingBetterLeaders
RenatoJ.Orsato
SUSTAINABILITYSTRATEGIES
WhenDoesItPaytoBeGreen?
JamesTeboul
SERVICEISFRONTSTAGE
PositioningServicesforValueAdvantage
Jean-ClaudeThoenig&CharlesWaldman
THEMARKINGENTERPRISE
BusinessSuccessandSocietalEmbedding
RolandoTomasini&LukVanWassenhove
HUMANITARIANLOGISTICS
SUSTAINABILITY
STRATEGIES
When Does It Pay to Be Green?
Renato J. Orsato
©RenatoJ.Orsato2009
Softcover reprint of the hardcover 1st edition 2009 978-0-230-21298-5
Allrightsreserved.Noreproduction,copyortransmissionofthis
publicationmaybemadewithoutwrittenpermission.
Noportionofthispublicationmaybereproduced,copiedortransmitted
savewithwrittenpermissionorinaccordancewiththeprovisionsofthe
Copyright,DesignsandPatentsAct1988,orunderthetermsofanylicence
permittinglimitedcopyingissuedbytheCopyrightLicensingAgency,
SaffronHouse,6-10KirbyStreet,LondonEC1N8TS.
Anypersonwhodoesanyunauthorizedactinrelationtothispublication
maybeliabletocriminalprosecutionandcivilclaimsfordamages.
Theauthorhasassertedhisrighttobeidentified
astheauthorofthisworkinaccordancewiththeCopyright,
DesignsandPatentsAct1988.
Firstpublished2009by
PALGRAVEMACMILLAN
PalgraveMacmillanintheUKisanimprintofMacmillanPublishersLimited,
registeredinEngland,companynumber785998,ofHoundmills,Basingstoke,
HampshireRG216XS.
PalgraveMacmillanintheUSisadivisionofStMartin’sPressLLC,
175FifthAvenue,NewYork,NY10010.
PalgraveMacmillanistheglobalacademicimprintoftheabovecompanies
andhascompaniesandrepresentativesthroughouttheworld.
Palgrave®andMacmillan®areregisteredtrademarksintheUnitedStates,
theUnitedKingdom,Europeandothercountries.
ISBN 978-1-349-30334-2 ISBN 978-0-230-23685-1 (eBook)
DOI 10.1057/9780230236851
Thisbookisprintedonpapersuitableforrecyclingandmadefromfully
managedandsustainedforestsources.Logging,pulpingandmanufacturing
processesareexpectedtoconformtotheenvironmentalregulationsofthe
countryoforigin.
AcataloguerecordforthisbookisavailablefromtheBritishLibrary.
AcatalogrecordforthisbookisavailablefromtheLibraryofCongress.
10 9 8 7 6 5 4 3 2 1
18 17 16 15 14 13 12 11 10 09
This book is dedicated to the memory of my beloved mother,
Olinda Romani Orsato (Nov. 10, 1939–Dec. 3, 2004), an
unconditional supporter of all my intellectual journeys, whose
ability to love and accommodate conflict inspired my
optimism – that a sustainable world is indeed possible.
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CONTENTS
ListofFigures xi
ListofAcronyms xii
Preface xv
Acknowledgements xxi
PART I FUNDAMENTALS
1 When Does It Pay to Be Green? 3
GreeningasaCommitment 5
GreeningasaCoreCompetence 9
TheFrontiersofCorporateEnvironmentalism 13
MethodologicalChallengesinWhenItPaysToBeGreen 17
Conclusion 21
2 What Are Sustainability Strategies? 23
WhatSustainabilityStrategiesarenot 24
CompetitiveAdvantage:PositioningandCapabilities 26
CompetitiveEnvironmentalStrategies 29
BeyondCompetition:SustainableValueInnovation 36
TheSustainabilityStrategiesPortfolio 39
Conclusion 40
PART II COMPETITIVE ENVIRONMENTALISM
3 Eco-Efficiency 45
FromResourceProductivitytoEco-Efficiency 46
Eco-EfficiencyattheFirm:LeanThinking 48
Eco-EfficiencybeyondBorders:Industrial
Symbiosis 51
Eco-EfficiencyintheSkies:CarbonCredits 55
WhenEco-EfficiencyPays 59
Conclusion 63
ix
