Shades of "Going Green"

• Posted by Ashley Fidel
• On July 14, 2008


• Interests: Corporate Social Responsibility

With so many companies “going green,” releasing ambitious sustainability plans and, sometimes, greenwashing, how do you pick apart and compare these eco-minded strategies? The Wharton conference “Winners and Losers in Green Technologies” offered a window into how different companies are turning the “green economy” into real commercial opportunity.

During the conference, Ian C. MacMillan, Wharton professor and director of the Sol C. Snider Entrepreneurship Research Center, discussed how reducing a company’s environmental impact and profiting simultaneously requires a new strategy for innovation. However, by collecting a list of the top 50 R&D spenders and their price-earnings ratio, MacMillan demonstrated that two thirds of the highest spenders have a below average ratio. This research shows that “firms confuse lavishing money on a problem with solving it, and end up with little to show except high R&D expenditures.”
So if the traditional approach to innovation isn’t working, what is a more effective alternative? MacMillan suggests “options reasoning” and the approach of companies like DuPont who create a portfolio of small and periphery investments. Through this strategy, failing projects can be abandoned easily and cheaply, while more promising ventures can receive increasing investment attention. DuPont has pursued both cellulose-derived ethanol (made from agricultural waste, not fresh crops) and butanol as optimistic projects, but still only two of many “options.”

Other companies, like the personal jet service NetJets, have chosen an environmental approach that focuses on the choices and actions of their customers. Because private aviation causes more carbon pollution, per capita, than any other form of travel, customers are given the choice to pay an intermediary to offset his or her pollution. The total customer payments are then invested in pollution-reducing activities like wind and solar power. These offsets are currently voluntary for NetJets customers, but they will eventually be included upcoming contract renewals in Europe.

The DuPont and NetJet strategies show how “going green” means very different things for different companies. Read the entire article here to learn more about the conference and innovation in the “green economy.”

Vote and let your voice be heard!
YES	NO
Click to Vote Yes	Click to Vote No

• Comments (0)
• Email This
•