Sustainability and strategy

Good to see a serious management journal – MIT’s Sloan Management Review – regularly featuring items on this issue. John Sterman’s ‘Sober optimist’s guide to sustainability‘ and an interview with Rebecca Henderson are both good. Rebecca uses the fact that making every shirt uses hundreds of gallons of water to point out that we are just not aware of wider consequences of what we do – and if we don’t know, we are hardly likely to act, either as consumers or firms.  There are tons of basic facts like this, e.g. there are about 5 acres (2 hectares) of land area for each person on the planet, about five football pitches – rather less if we leave out barren territory, so everything we consume and all the waste we produce has to come from and return to just that small area.

For thinking about implications for strategy, I’ve just been pointed to Green to Gold by Daniel Esty and Andrew Winston, which looks at what leading companies are already doing. It’s pretty easy to extend the strategic architecture of a business to incorporate its impact on natural resources, and I will include a summary of how that works in the next edition of my textbook.

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