The Business of Sustainability: Our Editor Speaks

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Next month, MIT Sloan Management Review editor-in-chief Michael S. Hopkins will speak at the Opportunity Green business conference at UCLA. He’ll be expanding on our recent special report on the business of sustainability. For a hint of what he’ll discuss, there’s an interview with him on the conference website. Some highlights:

One of the most baffling results from your survey is that while 92% of respondents said their company was “addressing sustainability in some way,” 70% said they still had not developed a clear business case for it.

That is the contradiction that gets to the heart of the issue, and as we continue with the second round of the survey that is probably where we’re going to do the most digging. It’s one thing for an executive to understand that sustainability is going to have a major impact. It doesn’t mean they understand how to make a case for investing in products that will capitalize on it.

One reason for this contradiction is this enormous gap between experts, or “thought leaders,” and novices. Novices recognize sustainability is going to have a big impact, but they are stuck in the “green” silo. To them, sustainability can seem like a cost rather than a benefit. Unfortunately, that’s not going to drive company behavior.

Thought leaders see sustainability in system-wide terms. Improving products, motivating employees, lowering costs, and improving relationships with governments, the public, the capital markets — even competitors. They think about many, many different things — it’s a bigger way to think. Suddenly opportunities to create value seem much more obvious.

According to your survey, improving company reputation seems to be the major driver of sustainability. Do you see this as a weakness, going forward?

I can see it cutting both ways, both for good and for ill. Depending on how well we do in ferreting out green-washing. For the typical company, reputation is the reason they think they’re doing sustainability, so if they got away with making false claims, that would be bad. And yet as a driver of activity, what’s wrong with reputation being a good return loop, a good feedback loop?

Reputation is very complex when it comes to sustainability. One of the examples is Nike. They have made amazing progress in improving the sustainability of their products, by redesigning them to use fewer materials, for example.

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