The common norm must logically be the toughest. If the starting point is the current approach to business, the view of the future is likely to be an optimistic extrapolation. Once senior managers establish a consensus about the shape of things to come, they can fold that future into the present. They should ask: What are the milestones on the path to our desired future? What steps can we take today that will enable us to get there?
How will we know that we are moving in that direction? Ensure that learning precedes investments. Smart companies start small, learn fast, and scale rapidly.
Each step is broken into three phases: experiments and pilots, debriefing and learning, and scaling. These companies benchmark, but the goal is to develop next practices—not merely mimic best practices.
Stay wedded to the goal while constantly adjusting tactics. Smart executives accept that they will have to make many tactical adjustments along the way. Although directional consistency is important, tactical flexibility is critical. Build collaborative capacity. Use a global presence to experiment.
Multinational corporations enjoy an advantage in that they can experiment overseas as well as at home. The governments of many developing countries have become concerned about the environment and are encouraging companies to introduce sustainable products and processes, especially for those at the bottom of the pyramid.
Companies can turn antagonistic regulators into allies by leading the way. For instance, HP has helped shape many environmental regulations in Europe, and it uses the resulting brownie points to advantage when necessary. In the European Union told hardware manufacturers that after January they could not use hexavalent chromium—which increases the risk of cancer in anyone who comes in contact with it—as an anticorrosion coating.
Like its rivals, HP felt that the industry needed more time to develop an alternative. The company was able to persuade regulators to postpone the ban by one year so that it could complete trials on organic and trivalent chromium coatings.
This saved it money, and HP used the time to transfer the technology to more than one vendor. Companies in the vanguard of compliance naturally spot business opportunities first. Calculating that the government-sponsored recycling arrangements were going to be expensive, HP teamed up with three electronics makers—Sony, Braun, and Electrolux—to create the private European Recycling Platform.
Once companies have learned to keep pace with regulation, they become more proactive about environmental issues. Many then focus on reducing the consumption of nonrenewable resources such as coal, petroleum, and natural gas along with renewable resources such as water and timber. The drive to be more efficient extends from manufacturing facilities and offices to the value chain. At this stage, corporations work with suppliers and retailers to develop eco-friendly raw materials and components and reduce waste.
The initial aim is usually to create a better image, but most corporations end up reducing costs or creating new businesses as well. Companies develop sustainable operations by analyzing each link in the value chain.
First they make changes in obvious areas, such as supply chains, and then they move to less obvious suspects, such as returned products. Most large corporations induce suppliers to become environment-conscious by offering them incentives. This has resulted in techniques to improve crop yields and seed production.
Some companies in the West have also started laying down the law. In like vein, Unilever has declared that by it will be purchasing palm oil and tea only from sustainable sources, and Staples intends that most of its paper-based products will come from sustainable-yield forests by Tools such as enterprise carbon management, carbon and energy footprint analysis, and life-cycle assessment help companies identify the sources of waste in supply chains.
Life-cycle assessment is particularly useful: It captures the environment-related inputs and outputs of entire value chains, from raw-materials supply through product use to returns. Take the case of FedEx, which deploys a fleet of aircraft and 44, motorized vehicles that consume 4 million gallons of fuel a day. Despite the global slowdown, the company is replacing old aircraft with Boeing s as part of its Fuel Sense program, although it will postpone ordering new ones until That's why, for her, the companies that make it clear to consumers where their ingredients are from and publish clear statistics and information about sourcing, manufacturing and direct environmental impact are the ones she's more eager to support.
A lot of the time, that means avoiding some of the biggest retailers. Gbla recommends shopping at second-hand stores when possible as a way to guarantee you're not contributing to the "fast fashion" industry, which isn't always good for the environment.
She also tries to purchase less and instead invest in lifetime products, which she said has the added bonus of saving her money in the long run. At the end of the day, Gbla said, sustainability is about using less and being more intentional with your purchases, a good habit for both your finances and the planet. She is a rising junior at Northwestern University studying journalism and psychology. Her mentor is Nate Skid. The series is edited by Cindy Perman. Skip Navigation. VIDEO About Boston Consulting Group Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities.
BCG was the pioneer in business strategy when it was founded in Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures.
Despite allaying fears in the short term, the fact that both the ECB and future growth will have a key role to play in determining the sustainability of debt suggests that the outlook for the most heavily indebted economies of the euro area is somewhat fragile. When the recovery is set in motion, the first challenge will lie in defining a fiscal policy which helps to boost the economy.
In a second phase, the challenge will be to ensure that fiscal policy becomes more disciplined but without smothering growth. When we analyse the available margin for manoeuvre, it is clear that this will not be an easy task — but not an impossible one either.
One of the limits of this path is defined by the primary fiscal balance i. However, reducing it significantly is quite another matter: Italy, France and Spain would need significantly more positive primary balances than those registered in recent years, and Portugal would have to be at least as disciplined as it was in Would a tightening of risk premiums compromise the sustainability of debt? The above findings depend on two important assumptions: i a return to sustained nominal GDP growth in the coming years, and ii the interest rate environment remaining favourable.
How fragile is each economy in the face of this change in the environment? In the case of Italy, Belgium and Spain, the interest rates that would put pressure on their levels of debt exceeds current levels by more than 1 pp.
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