COTABATO STATE UNIVERSITY
GRADUATE SCHOOL
Going Green Can Be Good for the
Bottom Line
By: Yevgenia Nayberg
These days, almost every company
supports the idea of a greener planet. Most
acknowledge the ethical case for building
supply chains that conserve energy and
cause less environmental damage.
But according to Ozge Islegen, an
assistant professor of managerial
economics and decision sciences at the
Kellogg School, there is increasing
awareness that it also makes good business
sense to design one’s operations around
social and environmental sustainability. With
the rising cost of raw materials, shifts in
stakeholder expectations, increasing
complexity of global supply chains, and new
government standards (including the U.S.’s
Clean Power Plan and the U.N.’s
commitments to fight climate change),
reducing one’s impact on the environment is
more than just a public service—it is
becoming part of the value proposition.
“Everyone recognizes that this is the
direction we need to go,” Islegen says.
“Now it’s a matter of making environmental
performance a part of corporate strategy.
And we find that there actually are strategic
reasons to build sustainable operations. It
might even give you an edge.”
Becoming an Industry Pioneer
There has always been at least one
incentive for companies to focus on
environmental performance: avoiding
negative publicity. And with the explosion of
social media, that incentive has only
strengthened. Any news of severe pollution
or lax environmental standards will spread
instantaneously—and leave a mark.
Volkswagen found this out after designing
engines to cheat on emissions tests in 11
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million of its diesel cars. The company is
now reeling from customer anger, product
recalls, and plummeting shares, not to
mention fines worth billions of dollars.
At the same time, business leaders
are learning that clean operations and
higher growth can go hand in hand. Now
that customers, investors, activists, and
even a company’s own employees are
voicing concerns about environmental
impact, a greener record does more than
simply guard against public-relations
disasters. It can bolster a firm’s reputation.
Even in cases where a sustainable
operations strategy drives up costs, the
advantages that come with a good
reputation can go a long way towards
offsetting those costs. Becoming an industry
pioneer, for example, can strengthen a
firm’s appeal among potential customers
and partners, and grant that firm a
prominent voice in global civil society—all of
which ultimately serves the business. The
outdoor apparel company Patagonia is one
such industry leader. In 2010, Patagonia
helped found the Sustainable Apparel
Coalition, an alliance of 30 companies from
the clothing and footwear industries.
“Companies that improve their
environmental performance need not
surrender competitive advantage,” Islegen
says.
Guide Questions:
1. How can becoming “green” be an
advantage to a company? Justify your side.
2. Do you believe that reducing one’s
impact on the environment is more than just
a public service and is becoming part of the
value propositions? Explains this statement
and give examples of 3 companies that are
into this practices?
 COTABATO STATE UNIVERSITY
GRADUATE SCHOOL

3. Research about PATAGONIA and relate

how it reach to be an industry leader.

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