Why the Business Case for Sustainability Will Win Out

The Trump administration’s dismissal of U.S. climate promises casts a shadow over climate change commitments by the country. But U.S. corporations still have considerable incentive to move forward on their own plans, despite the softening of government support.

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Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
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Last summer, the beer company Anheuser-Busch temporarily rebranded its iconic Budweiser cans by plastering the word “America” across them instead of the word “Budweiser.” Nothing says “I love the U.S.A.” like a clever marketing campaign, right?

In fact, Anheuser-Busch has another program that sells its passion for this country in a more concrete and more profound way: It’s called the Better World campaign, and it has resulted in the company’s reduction of water use at its U.S. breweries by almost 50% over the past 10 years, recycling of 99.8% of its waste at the same facilities, and scaling back on its packaging materials by more than 75,000 tons. Three months ago, Anheuser-Busch went a step further and announced it would purchase 100% of its electricity from renewable sources by 2025 — an act it estimates will make it the largest corporate direct purchaser of renewable electricity in the global consumer goods sector.

Then Donald Trump declared that he would withdraw the United States from the 2016 Paris climate agreement. The United States had reiterated in that global accord that it was targeting a reduction of U.S. greenhouse gas emissions by 26% to 28% below 2005 levels by 2025.

Anheuser-Busch’s reaction? Chief sustainability and procurement officer Tony Milikin reaffirmed the company’s climate commitments. “Fossil fuels contribute directly to climate change,” he wrote, in a column published the same day as Trump’s statement. “By initiating long-term agreements with clean-energy providers, businesses can provide stable demand and the capital for further investment in local renewable energy infrastructure projects.” Buying renewable energy makes good business sense, Milikin added: “In some markets, renewable energy purchased via PPAs [power purchase agreements] is cheaper than grid-sourced electricity.”

Milikin’s comments may not have been designed as a direct rebuke to the president, but they essentially said that Anheuser-Busch remains fully committed to climate efforts because it’s (1) good for America and (2) economically smart for the company.

Anheuser-Busch is not an outlier. More than 1,200 U.S. governors, mayors, and businesses have signed an open letter pledging that “We Are Still In.” Apple, Campbell Soup, General Electric, Facebook, Tesla, and Walmart have all said that they will continue with company-specific plans to battle climate change.

MIT Sloan Management Review has been investigating sustainability’s business case for years. Our new report, “

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Topics

Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
See All Articles in This Section

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