The Performance Frontier - Innovating for a sustainable strategy
Harvard Business Review / May 2013
Robert G. Eccles and George Serafeim
By now most companies have sustainability programs. They’re cutting carbon emissions, reducing waste, and otherwise enhancing operational efficiency. But a mishmash of sustainability tactics does not add up to a sustainable strategy. To endure, a strategy must address the interests of all stakeholders: investors, employees, customers, governments, NGOs, and society at large.
In this article the authors examine the trade-offs and provide a framework for creating sustainable strategies that—by definition—simultaneously boost both financial and ESG performance. It requires companies to do two things: focus strategically on the most “material” ESG issues—the ones that have the greatest impact on the firm’s ability to create shareholder value; and produce major innovations in products, processes, and business models that prioritize those concerns.