Sustainable Management in Finance
Sustainable Management in Finance
Project 2
1. How can sustainable production or services be less expensive than traditional ones?
Traditionally sustainable production or services usually recognized as more expensive and it is hard for companies to retain immediate profit from the investment. Part of the reason is because companies have to fundamentally change the way they think about ‘lowering costs, taking a leap of faith’ that initial investments made in more-costly materials and methods will lead to greater saving down the road. The key to make sustainable production or services be less expensive than traditional ones is not by focusing on reducing the cost of each part but on increasing the efficiency of the system as whole. By taking a systems approach requires the willingness to buck the conventional financial wisdom, however in long run the return on investment is more profitable. Many companies who took this challenge strongly demonstrate that economic development and environmental consciousness is not a necessary trade-off.
Instead, the purist of sustainability tends to be the competitive advantage for the organization when all business facing limits on their resources and their customers’ buying power.
According to the article “Making Sustainability Profitable”, commonly among the successful sustainable companies they share three main approaches.
1) Long view approach – Many companies spent more expensive methods of sustainable operation on the initial stage that eventually lead to dramatically lower costs and higher yields.
2) Bootstrap approach – Other companies started with small changes to the current process to generate substantial cost saving, which later has been used in finding advanced technologies that make the production more efficient.
3) Customer and supplier approach – lastly, some companies spent more effort on the operation method on the touch point with their consumer and suppliers. At the same time create
Project 2
1. How can sustainable production or services be less expensive than traditional ones?
Traditionally sustainable production or services usually recognized as more expensive and it is hard for companies to retain immediate profit from the investment. Part of the reason is because companies have to fundamentally change the way they think about ‘lowering costs, taking a leap of faith’ that initial investments made in more-costly materials and methods will lead to greater saving down the road. The key to make sustainable production or services be less expensive than traditional ones is not by focusing on reducing the cost of each part but on increasing the efficiency of the system as whole. By taking a systems approach requires the willingness to buck the conventional financial wisdom, however in long run the return on investment is more profitable. Many companies who took this challenge strongly demonstrate that economic development and environmental consciousness is not a necessary trade-off.
Instead, the purist of sustainability tends to be the competitive advantage for the organization when all business facing limits on their resources and their customers’ buying power.
According to the article “Making Sustainability Profitable”, commonly among the successful sustainable companies they share three main approaches.
1) Long view approach – Many companies spent more expensive methods of sustainable operation on the initial stage that eventually lead to dramatically lower costs and higher yields.
2) Bootstrap approach – Other companies started with small changes to the current process to generate substantial cost saving, which later has been used in finding advanced technologies that make the production more efficient.
3) Customer and supplier approach – lastly, some companies spent more effort on the operation method on the touch point with their consumer and suppliers. At the same time create
Bibliography: Eccles, R. G., Perkins, K. M., & Serafeim, G. (2012, Summer). How to become a sustainable company. MIT sloan Management Review . Haanaes, K., Michael, D., Jurgens, J., & Rangan, S. (2013, March). Making Sustainability Profitable. Harvard Business Review . Committee on the Status of Pollinators in North America. (2007). Status of Pollinators in North Amarica. Retrieved from http://books.nap.edu/openbook.php?record_id=11761. Eccles, R. G., Perkins, K. M., & Serafeim, G. (2012, Summer). How to become a sustainable company. MIT sloan Management Review . Global Environmental Management Initiative. (2008). Connecting the Drops Toward Creative Water Strategies - A Water Sustainability Tool. Retrieved from http://www.gemi.org/water/anheuser.htm. Goldman Sachs. (2005). Environmental Policy Framework. Retrieved from http://www2.goldmansachs.com/. Haanaes, K., Michael, D., Jurgens, J., & Rangan, S. (2013). Making Sustainability Profitable. The Globe . Haanaes, K., Michael, D., Jurgens, J., & Rangan, S. (2013, March). Making Sustainability Profitable. Harvard Business Review . International Rivers. (2001). Dams in the Cordillera. Retrieved from http://internationalrivers.org/files/021214.corddams.pdf. Potter, K.W., Council on Water Resources Update. (2006). Estimating Potential Reduction Flood Benefits of Restored Wetlands. The Corporate Ecosystem Services Review