Sustainability, Inc.: The Business of Green

By Reg A. Montague 

January 2011

Businesses are facing increasing pressure to incorporate sustainability into their strategies, products and service delivery. The most common definition of sustainable development was provided by the World Commission on Environment and Development in 1987: "Sustainable development...meets the needs of the present without compromising the ability of future generations to meet their own needs."  The short hand has been "People, Planet, and Profit." In other words, sustainability addresses economic, environmental and social considerations. Some refer to this as the "triple bottom line." 

Although firms face many pressures to pursue sustainability, government mandates and policies and the citizen-consumer are the most pressing.

Government Mandates and Policies

For many decades, governments have sought to regulate environmental as an action to preserve the environment. The Clean Air Act, the Clean Water Act, the Resource Conservation & Recovery Act, Superfund Amendments & Reauthorization Act, and Pollution Prevention Act are United States examples of environmental regulations. The Waste Electrical and Electronic Equipment Directive (WEEE) and the Restriction of Hazardous Substances (RoSH) Directives are European Union examples of environmental regulations.

"If we harness ingenuity, take the talent of our workers and innovators, and we invest in it, we'll forge a future where life is better in our country over the long run," said President Obama as the administration announced a program to provide $2.3 billion for clean energy jobs in January 2010.

Although regulations have generally been "command and control" intended to control point source emissions, there has been an increased focus on continuous environmental improvement and risk management. Additionally through the Energy Efficiency Tax Credit and Energy Star program the government has provided incentives to drive more efficient use of resources.

With these efforts, governments have been taking aggressive action to improve the environment and provide economic incentives to promote sustainable development.

The Citizen-Consumer

Consumers have also provided a tremendous amount of pressure. They have indicated an interest in "green" and socially responsible products. They have been demanding products that don't harm the environment and that don't harm people in places where the materials are extracted or made.

In 2007 a consultancy conducted a survey of nearly 8,000 people in the United States, Canada, France, Germany, United Kingdom, China and India and found that 87% of consumer respondents are concerned about the environmental and social impact of their purchases.

Consortium corporate partner Starbucks has seen this as good business with their Fair Trade Certified Coffees by incorporating sustainability as part of their business strategy.  According to their Web site, "We have always worked to buy our coffee in a way that respects the people and places that produce it. It's simply what we believe to be right." This suggests that Starbucks has integrated sustainability into its business strategy.