In their book Green to Gold, Esty and Winston use the “Green Wave” to corroborate the unprecedented challenges that businesses face in their routine day-to-day activities. They also use the word ‘gold’ to refer to the benefits that the businesses accrue in terms of higher profits, revenues, lower operational costs and lower rates of interests from commercial lending institutions. Furthermore, other benefits may come about to the business due to their improved business environment. These improvements may include increased brand loyalty from consumers and increased business goodwill. (Esty & Winston, 11). In the book, the authors describe those companies that are able to go through the day-to-day hurdles in business but still come out victorious as “Wave Riders”.
Green-to-Gold strategy 1
Develop resource allocation
This strategy involves perking up resource productivity. This is done in order to ensure that a company gets optimum results from their environmental and safety strategy. This will produce a winning result for both the company and the consumers.
Green-to-Gold strategy 2
Eco cost decrease
This strategy involves lessening the environmental costs and the burden of regulation. It concentrates on the funds used up in environmental management and pollution control. In addition, millions of euros and dollars are being used every day on waste clearance and pollution management equipment. This includes the time spent by managers to deal with the pollution management issue and fill out forms. This time may be well spent doing other things which are profitable and of benefit to the shareholders. In addition, there is a cost of fines imposed for mismanagement of the environment. If these costs are decreased through proper environmental management, then the company will be able to obtain a comparative advantage in the industry.
Green-to-Gold strategy 3
Value Chain Eco-Efficiency
A good number of companies have been able to lower their financial and environmental costs of product distribution. One of those companies is IKEA with its flat packaging strategy where they use every space out of their packaging boxes, including trucks and trains. This is to make use of every millimeter available for packing goods. The strategy employed by IKEA also helps them save on fuel. (Esty and Wilson 164).
Green-to-Gold Strategy 4
According to Green to Gold, Wave Riders find the solutions long before problems find them. This means that a company should examine their whole value chain instead of only examining the supply chain. The company will, therefore, be able to examine risky decisions it makes on the environment. Moreover, they will understand how the restrictions offered by nature affect them as a company.
Green-to-Gold Strategy 5
This involves meeting the companies’ customers’ environmental needs. Recognizing consumer needs and coming up with a product to satisfy those needs is not a straightforward activity for any company. However, with the growing rate of environmental awareness among consumers, coming up with a commodity that fully satisfies those needs will provide an Eco-Advantage for the company. A company can avoid making mistakes by observing the following strategies.
• Meeting those needs that only exist
• The company should not ignore the needs or preferences of the customers in any way
• The company should not forget its own needs and the costs it will incur in the venture either
Green-to-Gold Strategy 6
Eco-Sales and Marketing
Companies should develop their business strategies in such a way as to build their consumers’ loyalty and numbers based on their green attributes. Wave Riders should recognize that in order to make money they have to find a way to meet ever-growing consumer needs. Currently, most consumer needs are oriented towards greener and environmentally friendlier products.
Green-to-Gold Strategy 7
Eco-Defined New Market
Wave Rider companies should come up with value-added innovations. A company such as Toyota foresaw the Green Wave coming and thus came up with “Prius, an energy efficient vehicle. This hybrid vehicle, which was an environmentally friendly innovation, also increased profits and shareholders’ value.
Green-to-Gold Strategy 8
Selling your company as an environmentally conscious company is only workable if the company is taking care of the environment (Esty & Winston, 103).
Green as tar
Esty and Winston describe companies that have met their environmental requirements and which are making profits from it as Wave Riders. Wave Riders is a term used to refer to companies that are able to foresee the growth of environmentally conscious consumers, and thus divert their innovations to fit their consumers’ needs. These companies were, thus, able to make a lot of money from their environmentally friendly innovations. According to the book Green to Gold, a company such a petroleum company BP is one of the companies which can be dubbed as green Wave Riders. (Esty and Wilson 25) Green to Gold claims that many companies did not take kindly to the fact that BP got listed among the most environmentally friendly companies. Some of the critics even referred to BP as just a darned agreeable impression of an environmentalist. Green to Gold does not totally support the claims that BP is not environmentally friendly, nor does it refute these claims. BP has achieved impressive reductions in the emission of greenhouse gases, and it still maintains its position as the world’s greatest providers of renewable energy, e.g. solar panels. However, even with this remarkable accomplishment, more than 99% of the company’s revenue still comes from oil extraction. BP used this as a strategy to improve their image, but was criticized relentlessly for trying to prove how much their commodities are environmentally friendly. In the short run, BP was subject to a fair amount of criticism. However, BP was eventually viewed as a greener and environmentally friendlier company. This is shown by the ranking of BP as one of the companies with the highest improved brand value between 2001 and 2005. In addition, BP is now seen as a better employer for graduated engineers as compared to other companies (Esty and Wilson, 137).