Dr Dan Esty, Professor for Environmental Law and Policy at Yale University, stopped by at the SIIA in February, en route around Asia to promote his new book "From Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value and Build Competitive Advantage". He told SIIA members about the major changes and shifts in thinking taking place in the business world on environmental issues, and how corporate environmental strategies were being formed and re-formed in response. Today, there was no company that could ignore the environment and get away with it. Dr Esty’s study, which took 4 years to complete and involved hundreds of different sized companies from around the globe, essentially looked at how businesses used environmental strategy to gain competitive advantage. He found companies that could be called ‘smart companies’ – those that early on had included environmental sustainability factors into their business strategies and were now seeing these efforts begin to pay off. Indeed, firms that did not ‘jump on the bandwagon’ would quickly start losing their competitive advantage. While he concluded that no one company had it all right, and that there were many other factors to compromise on or trade-off against environmental interests, it was clear that the business sector was beginning to wake up to a ‘green wave that is real’. Government was no longer driving companies’ attention to the environment, business itself was becoming increasingly proactive and innovative, not just to stay competitive, but also to address sustainability issues that could impact negatively on their bottom-line and branding. He pointed to Coca Cola in India for example, whose bottling operations had been accused of causing water scarcity and pollution in India, leading to massive protests by the communities affected. This prompted serious injury to the firm’s credibility and large financial costs to mitigate the damage. Dr Esty pointed to three main factors influencing businesses’ growing attention to the environment – a) the implication of business activities on nature; b) rising costs, particularly energy, which has doubled over the last few years; and c) increasing interest in the environment by stakeholders, such as consumers and investors. Companies that implemented eco-efficient initiatives could save on energy costs while preserving the environment. Various stakeholders including employees, capital market and customers are increasingly demanding that business be more aware of environmental issues. Banks and insurance companies are beginning to require that corporate performance take the environment into account, and include strategies to manage environmental impact. Companies have been trying to promote innovation in "greener" or "more environmentally friendly" products to attract customers. Unilever is an example of a company that has set a demanding pace in this arena, while Wal-Mart's intention to be the biggest retailer of organic products has affected its supply chain considerably. Business concerns have moved beyond how the environment affects the company itself, but also to the impact on supply chains and the downstream (customers). Environment has become an important competitive differentiation element. When everybody has access to low-cost capital, natural resources, low-cost labor, environment becomes a factor that will differentiate one from another. So even a small environmental footprint can have a tremendous effect. The case of the Ford motor company similarly, was an example of how failure to recognize the environment as a strategic factor could rob a business of its market. Bill Ford was a staunch environmentalist. But in trying to make Ford go green, he focused too much on the company and not the car. Toyota on the other hand, did the opposite and has pulled significantly ahead of the competition. Environment was increasingly being seen no longer as just a burden to bear or standards to meet, but as an "opportunity". Jack Welch, CEO of General Electric had the vision to provide solutions that were environmentally as well as economically advantageous. Through its "eco-imagination" initiative GE committed to produce more efficient products such as gas power plants, locomotives and jet engines that benefit its customers and society at large. "Green-streaming" has become a huge market opportunity for firms of all sizes. Finally, Dr Esty also commented specifically on Singapore. Singapore, he said was fast emerging as a wealthy country, and therefore facing developed nation problems associated with economic growth, pollution, chemical exposure, etc. He was critical of Singapore's poor performance in terms of sustainability, and suggested that the country look more closely at the Environmental Sustainability Index, a new approach to environmental protection that was more data-driven. Starting from the index, the next step would be to determine how Singapore could learn from its peers, such as Hong Kong, and determine why and how other less-developed countries such as the Dominican Republic, could be doing much better than Singapore in sustainability. One key area to consider would be education, and particularly business education, where Dr Esty called for more courses on Corporate Social Responsibility and Corporate Environmental Management to help people adapt to the new trends in business approaches to the environment.