Green Marketing Grows Up

While some environmentally responsible organizations began incorporating green marketing initiatives into their overall business strategy as early as the 1970s, green marketing came into real prominence in the 1980s and early 1990s. Today, green marketing has evolved into a sustainable movement that’s at the forefront of a growing number of CEOs, corporate boards and investors, too.

This evolution is clear in “The Sustainable Economy,” published in this month’s issue of the Harvard Business Review. The article is co-authored by the founder and chairman of Patagonia, known for its commitments to environmentalism and social responsibility, the founder of Blu Skye, a sustainability consultancy, and Patagonia’s VP for environmental initiatives.

The authors quickly acknowledge a simple problem in the quest for a sustainable economy:  It’s generally cheaper to buy the product that has a worse impact on its environment than the equivalent product that does less harm. At least today that still holds true. But they go on to provide hope that three key developments in the quest for a sustainable economy will at some point inevitably converge, resulting in a new paradigm where a successful business and a sustainable business are one in the same. Could it possibly be so?


The first of these three developments is an effort to measure ecosystems in dollars and cents. While that may sound a bit “cold,” the authors make the point that while “the bounty of nature is priceless,” the failure to put a price on resources creates a mind-set in which they are treated as free. With a valuation system for natural resources, the “cost” of environmental damage and resource depletion can be factored into the bottom line as never before, making it more difficult for companies to downplay or disregard these impacts.

The second development also pertains to dollars – investment dollars, to be exact. Investors today increasingly use factors like environmental sustainability and social responsibility not only to filter out negative investment prospects but to positively valuate companies that limit their environmental impacts. These companies, investors are learning, are often better managed overall and their sustainability efforts help mitigate risks of negative impacts like regulatory enforcement actions, lawsuits and the depletion of natural resources essential to their  business.

The third trend is the development of “value chain indices.”  A VCI establishes parameters by which companies in a particular industry segment can be compared against one another. This tool could be used to weigh the difference between a company that generates a high volume of emissions that impact air quality, utilizes non-recyclable packaging and discharges toxic chemicals in the wastewater from its treatment process against another that powers its operations from renewable energy sources, minimizes packaging and uses recyclable materials and effective treats or reuses its wastewater.

All of these factors “add up,” if you will, to a very real and quantifiable impact to the bottom line that may finally take sustainability mainstream, not just for companies like Patagonia but for any value-seeking organization or investor.

Read the full article “The Sustainable Economy” by Yvon Chouinard, Jib Ellison and Rick Ridgeway in the October 2011 issue of the Harvard Business Review. And let us know where your organization stands in this evolutionary chain. What types of green marketing strategies have you tried? And where does your organization fit into the sustainable economy of tomorrow?