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A Strategic Approach to Sustainability Premium

Environmental Sensibility

Rosenberg, Mike

Date: Second Quarter 2016

Tags: environmental sustainability, COP21, Paris, climate change, Triple Bottom Line

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This article explores how senior managers might choose to address the challenge of environmental sustainability, not just for the sake of it being a moral imperative, but to perform their fiduciary responsibilities and to prepare their companies for the disruptive changes that the future holds. Given the gulf between how senior managers perceive the world and how activists, journalists and legislators see it, the path toward better environmental performance is likely to be an arduous one for many companies. While there are no easy solutions, the author suggests six strategic options and an equal number of steps to bolster the chances of choosing the right path.

Tools and Frameworks:
> "Six Strategic Options" summarizes six options to help you weigh up the trade-offs between the costs and benefits of compliance with environmental sustainability, so that you can set some strategic priorities.
> "Bring It All Together" is a single framework to compile your analyses of your firm's past, present and future.

Examples Cited:
BP's Deepwater Horizon accident, emissions frauds by automakers, greenwashing, PET, movie theater, strip mine, power plant, Henkel family, Virgin Group's Richard Branson, Patagonia's Yvon Chouinard, Nestlé, Roundtable for Sustainable Palm Oil, Greenpeace, Kit Kat, Google, Facebook, Ray Anderson, Interface Inc.

Research Basis:
Based on the author's years of teaching, researching, writing and consulting on this topic, which informed his book Strategy and Sustainability: A Hardnosed and Clear-eyed Approach to Environmental Sustainability for Business (Palgrave Macmillan, 2015).

About the Author:
Mike Rosenberg is an assistant professor of Strategic Management at IESE.

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