The question asked in our most recent informal innovation poll was
“What drivers of Green Innovation do see in your organization?” What
did you say about this?
Two green drivers stood out in your responses: customer demand and
competitive pressure. This is good news to advocates of green as it
shows free market forces are aligning with the socially responsible
business movement. This also suggests that the early claims of Porter
and van der Linde1,2 may be proven true with a change in tide.
The debate over whether green innovation is compatible with the
mission of business has been raging for years as has the debate over
the role of environmental regulation. But, here we see that market
forces out strip regulatory issues by a two to one margin. This
suggests that there is a quantifiable value to going green.
At the end of the day, companies are faced with the challenge of
finding the optimal strategy for responding to the pressure to go
green. Regardless of the source of the impetus, the problem remains
the same. Any investment is green must meet the same rigorous standard
of return on investment as any other product investment. Whether the
company is trying to minimize the eco-impact of its manufacturing
process or attacking the bigger downstream issues of product operation
and disposal footprint, the company’s scientists, designers, and
engineers must find ways to change the future product that are cost
effective and deliver value to the customer and the company.
In 1995, Alex Krauer, then Chairman and CEO of Ciba-Geigy, stated
“Financial performance and environmental performance can go hand in
hand. Eco-efficiency is the key to sustainability, in both economic and
ecological terms. The key to eco-efficiency is innovation and
productivity improvement.” Mr. Krauer was spot on in his advice.
Companies must move to green, sustainable business practices.
Companies that have a strong innovation culture are more likely to
success here.3 Building a sustainable innovation program is an important step on the path to green.
1 M. E. Porter and C. van der Linde
(1995a), ‘Green and Competitive – Ending the Stalemate’, Harvard
business review 73: 120-134.
2 M. E. Porter and C. van der Linde
(1995b), ‘Toward a New Conception of the Environment-Competitiveness
Relationship’, Journal of Economic Perspectives 9(4): 97-118.
3 Thomas Bernauer, et al. (2006),
‘Explaining Green Innovation Ten Years after Porter’s Win-Win
Proposition: How to Study the Effects of Regulation on Corporate
Environmental Innovation?’, CIS Working Paper No. 17.