Buying and Selling: Visions of Green

Vishal Agrawal, Henry J. Blommer Family Endowed Chair in Sustainable Business, is one of the leading sustainable business researchers in the world. He is committed to analyzing the role of corporations in addressing sustainability goals, as well as preparing future generations of leaders who can use business concepts to tackle global climate concerns.

Agrawal, who also is the academic director of McDonough’s Business of Sustainability Initiative, researches how businesses can incorporate sustainability in their operations and supply chains. Understanding that most environmental challenges can be solved by tackling the business problems behind them, he helped create the world’s first interdisciplinary M.S. in Environment and Sustainability Management degree. A partnership with Georgetown’s Earth Commons Institute and the Graduate School of Arts & Sciences, the program equips rising leaders with both the science and business skills needed to address sustainability challenges for any organization.

Here Agrawal shares his thoughts on how businesses can embed sustainability in their business model to ensure a lasting impact.

BUYING: A Business Approach to Sustainability

Organizations need to carefully consider the business case for sustainability strategies instead of simply adopting ad-hoc practices aimed at being more sustainable. Rather than viewing sustainability strategies as an additional cost aimed at protecting reputation or addressing criticism from different stakeholders, businesses need to carefully assess which sustainability strategies actually create business value and make them more sustainable. Sustainability strategies without the business case may not last long or even be adopted. Moreover, whether a sustainability strategy actually makes a business more sustainable depends on its operations, supply chains, and business model.

Take, for instance, an organization that decides to pursue more recyclable or reusable packaging. Whether this is cost-prohibitive or yields cost savings depends on the recycling infrastructure and consumer behavior. Similarly, whether this reduces consumption of materials and lowers impact also depends on the reverse logistics required to make this happen.

When sustainable business practices are built intentionally to align with core business strategies, companies can achieve their sustainability goals in addition to being more profitable.

SELLING: A Peripheral or Compliance Approach to Sustainability

A business strategy that uses eco-friendly practices only as a reactive compliance strategy or as a public relations ploy is simply (pardon the pun) not sustainable. Companies face increased pressure to be more sustainable from investors and shareholders, employees, and customers, and as a result, there are real financial implications for businesses. Prioritizing the wrong motivation for sustainability strategies can be financially detrimental and counterproductive.

The world is rapidly changing, and companies that proactively prepare for evolving market conditions, manage risk, and align their company to broader social and environmental goals will be better positioned for success in the future.

Looking beyond moral or ethical considerations, there are clear business motivations for embracing sustainable operations. Leaders who can harness the strategic value of sustainability — and understand both the environmental science and business principles necessary to achieve strategic sustainability outcomes — will derive more value from their objectives while striving to create a better future for business, for stakeholders, and for the world.

This story was originally featured in the Georgetown Business Spring 2024 Magazine. Download the Georgetown Business Audio app to listen to the stories and other bonus content.