Working Towards A Sustainable Economy

The "Triple Bottom Line" Path to Competitive Advantage

By Jenny Carless

Multinational corporations are re-designing products with the environment and their bottom line in mind. Buildings are being designed to clean their own wastewater and to provide superior energy efficiency. There's a monumental change afoot as businesses recognize the long-term economic rewards and return on investment of environmentally-sound choices.

"For years it was assumed that there was a cost associated with 'doing the right thing' environmentally," says Daniel Robin, founder of Integrated Investments International. "But there's now ample evidence that, with thoughtful design, doing the right thing is also a profitable, competitive advantage."

Yes, the words sustainable and economy can - and do - go together.

The Triple Bottom Line

The movement towards a sustainable economy incorporates three domains, which together have become known as the triple bottom line. Some refer to people, planet, and profit, while others talk about the balance of social equity, ecology, and the economy. Call it what you like, but pay attention. This is the future of business.

The World Business Council for Sustainable Development (WBCSD) defines sustainable development as "forms of progress that meet the needs of the present without compromising the ability of future generations to meet their needs."^{See 1} While definitions around this general concept vary somewhat, the point is that business can serve nature without sacrificing profitability.

There are many excellent resources available to companies that want to manage their own triple bottom line successfully. The WBCSD, the World Resources Institute, Rocky Mountain Institute, and The Natural Step (TNS) are organizations that provide information and/or services to help guide businesses towards sustainability.

Architect William McDonough and chemist Michael Braungart have written about the subject, and some of their design successes are featured in a film called, "The Next Industrial Revolution".

Eco-Effectiveness

Many are familiar with the concept of eco-efficiency (where, for example, the "3 Rs" of reduce, reuse, and recycle are the mantra). McDonough and Braungart take that concept one step further and advocate eco-effectiveness.

The two believe eco-efficiency doesn't go far enough.^{See 2} Nature, they explain, is not efficient, it is effective. (They suggest the cherry tree, whose fallen blooms are not waste but effective nutrients for the soil, as a simple example.)

The Sustainable Economy in Action

Can you say competitive advantage? Today we have comprehensive proof that sustainable planning can be economically beneficial - that an environmental advantage also provides a marketing advantage.

For example, corporations can gain competitive advantage by re-thinking product content. "By taking responsibility for the chemicals and materials that make up Nike's products and designing out the things that have long-term cost to people's health and the environment, we're in a much better business position," says Heidi Holt, global environmental director for Nike.

Companies can also benefit from rethinking architectural design to get at the triple bottom line, as Herman Miller Furniture's factory in Holland, Michigan (called "The GreenHouse") demonstrates. That building's $52 per square foot cost was paid back within its first year of operation from the energy savings and productivity gains alone.^{See 3}

Why Now?

Why has the movement towards a sustainable economy picked up so much steam in recent years? Monterey Bay, California community leaders met recently in a forum to discuss this question and suggested many drivers. Increased regulations, the growing scarcity of natural resources and their subsequent higher costs, and the growing effectiveness of NGOs at getting negative press for multinational corporations that aren't good environmental citizens are all factors.

Perceptions and expectations are also changing. There is a new realization on the part of corporate executives that their decisions have a global impact. This awareness has encouraged them to take a closer look at their practices and determine innovative ways to make environmental compliance profitable. In fact, leading companies are finding that the greatest gains derive from going substantially beyond compliance.

Another important factor is that environmental consciousness now has a seat on the board. Children of the environmental and civil rights movements of the 1960s and onwards are now key players in corporations and organizations around the world.

"The field of sustainability today is now principle-based," says TNS's Ruth Rominger. The Natural Step's framework, Rocky Mountain Institute's four principles of natural capitalism, the McDonough-Braungart Protocol, and others are examples. "Our way of looking at things has changed - we approach issues from a systems perspective, not as isolated problems," Rominger points out. "People are taking these principles and innovating - being creative with strategies for making business profitable and socially and environmentally friendly."

The Bottom Line for Your Business

In business, it's all about competitive advantage. By working with nature instead of against it, your company can increase profits and gain that essential advantage. As we move forward, competitiveness will be driven more and more by your ability to incorporate sustainability into your operations.

Today, not only can your business produce competitively priced goods and services and bring its ecological impact in line with the earth's needs, but it must.

© 2002 Jenny Carless
Jenny Carless is a freelance writer based in Santa Cruz, California.
www.jennycarless.com

Footnotes

1.  In "The Business Case for Sustainable Development," which can be found as a 307kb pdf file here or is also available at www.wbcsd.org/.
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2.  The Atlantic, October 1998 at www.theatlantic.com/issues/98oct/industry.htm.
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3.  See "Invitation to a Revolution: The Next Industrial Revolution" at www.thenextindustrialrevolution.org/context.html.
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