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Harvard Business Review

In: Business and Management

Submitted By idaniquec
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Making sustainability profitable
Haanaes, K., D. Michael, J. Jurgens, S. Rangan. March 2013.
Harvard Business Review. Vol. 91, Issue 3, Page 110—114
“We are moving to a world of scarce resources, in which companies will increasingly need to consider their total return not just on assets and equity, but on resources” ¹. Sustainability leads to innovation and effectiveness. It is hard for companies to believe that a sustainable production manner can be less expensive than a ‘quick-lowering-cost’ manner.
Companies follow different approaches to make their environmental efforts pay back financially. Firstly, the ‘long-view’ in which they see that investment eventually leads to lower costs and higher yields. “Secondly, a bootstrap approach to conservation. Companies start with small changes that generate costs savings, which they can use to fund advanced technologies that make production more efficient. The last approach is spreading the sustainability efforts to the operations of their customers and suppliers, in the process devising new business models that competitors find hard to emulate”². Companies have to recognize the fact that initial investments made in more-costly materials and methods will lead to greater savings on the long term. Also, “the pursue of sustainability can be a powerful path to reinvention for all business facing limits on their resources and their customers’ buying power”³.
Besides the impressive cost efficiencies, the growth that companies have gained by extending their sustainability efforts to the operations of their customers is even more impressive. There have been build unique business models by companies, by boosting the customers’ buying power and by creating interdependencies that are hard to copy.
There are several reasons why employees stay focused on ambitious ‘green’ goals. One of the reasons is of course scarcity, the

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