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Sustainable Profitability

In: Business and Management

Submitted By dennel
Words 991
Pages 4
Sustainable Profitability: Myth or Reality?

‘To all the children, yet unborn’ (Hart, 2010, p. v) this sentence shows the audience for whom not only the book by Hart but sustainability issues as a whole are meant. Commercials about acid rain, pollution, etcetera often grab our attention and all of them have one common message: if we do not act now, our children will bear the costs. On the other hand most people today grew up in a world that glorifies capitalism, profitability and shareholder value. This raises the question on whether or not it is possible to combine these two. Can one actually combine being a profit-driven company whilst being sustainable? In order to investigate this issue the sustainable value framework as developed by Hart (2010, p. 88) which will tackle pollution prevention, product stewardship, clean technologies and lastly the Bottom of the Pyramid (hereafter, BoP). This essay will argue that it is possible for profit-driven companies to pursue a sustainability strategy.

Firstly, pollution prevention will lead to cost reductions. Within the US alone, programs stimulating this issue have already saved ‘hundreds of millions of dollars over the past decade’ (Hart, 2010, p.99). Well publicized campaigns by world leadings firms such as DuPont, 3M and the like have served as examples of how pollution prevention has led to increasing cost saving ranging up to 500 million dollars (Hart, 2010, p. 89). Russo and Fouts (1997, p. 538) argue and empirically validate (Russo and Fouts, 1997, p. 548) that indeed investing in pollution prevention can ensure that companies ‘outperform’ competitors. Herein companies that are active in high growth industries are even more likely to reap the benefits of investing in pollution prevention (Russo and Fouts, 1997, p. 541).

Next to this, product stewardship will lead to increased financial performance. Take...

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