Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage by Daniel C. Esty & Andrew S. Winston

Published by: Yale University Press, 2006
Pages: 384 + xv pp
Price: $27.50
Reviewed by Amina E. Swanepoel

In Green to Gold authors Daniel Esty and Andrew Winston delve into some of the major environmental challenges that society, and in particular business corporations, face today.

The book is a structured guide detailing why and how business confronts environmentally-driven issues (which the authors dub the “Green Wave”) and build environmental thinking into their strategies.

Esty and Winston provide concrete examples from such well-known corporations as Toyota, Ikea and Nike; in-depth analysis based on hundreds of interviews with corporate leaders worldwide; and lessons drawn from the rich experience both men have in this field. Esty is a former top official with the Environmental Protection Agency and is the Director of the Center for Business and Environment at Yale University; Winston is a former Director of the Corporate Environmental Strategy Project at Yale University and is the founder of Winston Eco- Strategies, an organization that helps companies use environmental strategies to grow.

Green to Gold expertly tackles the huge subject of corporate environmental awareness by providing numerous anecdotes, case studies and real-life do’s and don’ts based on experiences of some of the top 50 “Green Wave” riding corporations. Esty and Winston demonstrate how companies have reaped the benefits of viewing environmental challenges as strategic opportunities to better their own organizations and surge ahead of their competitors (the eco-advantage). For example, in the 1990s, Toyota put an emphasis on environmental issues in designing a new car model and in recent years have reaped the benefits of this environmentally-friendly focus with its hugely successful hybrid gas-electric Prius. Today, while many in the auto industry are struggling and nearing bankruptcy, Toyota is generating record profits.

The authors also include examples of less successful corporate environmental initiatives to illustrate how even the best-intentioned plans can fall short, lessons that are equally important to understand. In 1999, Ford redesigned its main factory in Michigan. The company hired a well known green designer to ensure that the new and improved plant would have an environmentally sound design. Ford spent $2 billion on this project, and the new factory now boasts a vegetation-covered roof and rainwater reclamation system as well as solar panels and fuel cells. While their efforts to make their factory “green” should be applauded, Ford simultaneously ignored the biggest environmental issue it faces—that many of their automobiles lack fuel efficiency and contribute to both pollution and climate change. Ford failed to invest in environmentally sound cars and now must play catch-up to Toyota.

In detailing who should care the most about environmental issues, the authors list companies that have competitive markets for talent, such as those in the service sector. They note that in these types of organizations, primary assets (students/professors/employees/clients) can walk out the door if they are displeased with the company’s values. Conversely, primary assets will walk in the door if they support a company’s actions on the environment. The authors describe a survey of recently graduated students that found the great majority of individuals wanted to work for an organization (and were willing to take a pay cut of up to $12,000 per year to work there!) if the company had a good reputation for environmental responsibility.

As Esty and Winston point out, environmental issues are now impossible to ignore. There is an ever-increasing awareness among the public about the environment and our role in protecting it and an expectation that leaders — whether political, corporate or in the nonprofit world — will do all in their power to safeguard it, or at least cause as little harm as possible.

Green to Gold devotes significant time to discussing how conservation and acting with a green lens can actually save companies considerable amounts of money in the long run. However, even more important than the bottom line, and applicable across sectors and fields, is the focus on the importance of being green to an organization’s reputation. The authors quote Warren Buffet: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

While Green to Gold is geared toward the corporate world, the illustrations are also applicable to nonprofit organizations. Indeed, an organization that chooses not to acknowledge the environmental movement puts itself at risk of being left behind and seeming out of touch. Nonprofit organizations would be wise to consider addressing their environmental policies as part of their planning process. The potential for long-term savings, higher morale and greater productivity and new respect from current and potential donors is too valuable to ignore. Green to Gold can help nonprofits build a strategic eco-advantage that can differentiate them in their marketplaces and strengthen their contribution to an environmentally sustainable world.

STRATEGY MATTERS © No 4
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