Environmental strategies and competitive advantage in business

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In order to be able to comprehend how being green pays off, one must concentrate on the relationship between employing environmental attitudes and economic performance at a company level. Being green is especially important in the present and there is a wide range of domains that people have addressed when concerning the concept. "Some studies have shown that students who go to green schools have higher test scores, get sick less often and are healthier and happier" (Boys' Life 12). This makes it possible for someone to understand that profits associated with being green do not only involve financial aspects, as they are also likely to reflect positively on individuals when regarding matters from a series of other perspectives.

While this concept is surely important, people should not only focus on profits when trying to devise strategies of being green. Michael Porter's theory regarding "Resource-Based View" presents an intriguing view concerning how companies can use differentiation strategies with the purpose of providing their products with unique features. Even with the fact that it might provide marketing specialists with a series of issues during the first steps of a project, the Resource-Based View does not limit the choices that companies have with regard to the industry's structure. "Rather, it considers competitive advantage as resulting from the capabilities of firms to acquire and manage resources, such as technical capabilities, ownership of intellectual property, brand leadership, financial capabilities, and organizational structure and culture -- all of which can be deployed to serve the goal of creating competitive advantage around environmental innovation" (Orsato 129). Competitive advantage is thus a direct result of employing green strategies, as companies that take on this approach are likely to develop more competitive products and are probable to influence the masses to express particular interest in their overall business.

Brand reputation is a particularly important concept when discussing how being green pays off. The Exxon Valdez Oil Spill is certainly one of the worst environmental disasters in all of history and it enabled society to understand the gravity related with failing to take proper measures with the purpose of protecting the natural world. The fact that the company did not publicly get involved in protecting the environment before this incident happened made it difficult for it to recover and significantly damaged its reputation.

In contrast to ExxonMobil, BP actually got involved in devising methods to preserve the environment prior to dealing some of the worst blows in all of history to it. Even with the fact that the company is responsible for the worst case of environmental pollution that has ever happened (the 2010 Deepwater Horizon oil spill), the incident was seen with different eyes when comparing it to the Exxon Valdez oil spill. "Thanks to its positive eco-reputation, the company was given extra leeway" (Esty & Winston 141). They understood that it would be beneficial for them to invest in being seen as environmentalists and eventually profited from the enterprise.

Brand reputation is also indirectly responsible for bringing larger profits to a company and employing an environmental attitude is thus likely to increase a firm's value. Having a higher brand value is equivalent to having market power. Companies with market power "command higher prices, sell more, and develop closer relationships with customers and employees" (Esty & Winston 141).

The meaning of getting involved

One means to increasing environmental stability is represented by the reduction of the carbon print. In other words, emphasis is placed on the reduction of the carbon consumed with the scope of decreasing the negative environmental impact onto the environment. Within Australia, this endeavor has been approached at multiple levels, one notable effort being represented by the creation and implementation of a carbon tax. At this level then, the focus falls on the assessment of the tax and its short- and long-term impacts on the tourism and hospitality industry.

The first talks about the introduction of a carbon tax in Australia commenced years ago, but it was not until 2012 that the tax was actually implemented. The introduction of the tax in the country was explained by the fact that the Australia is the highest polluter among the developed countries; this conclusion was reached through the assessment and comparison of the carbon emissions per head of inhabitant and it was found that the Australian population polluted mostly.

The measure of introducing a carbon tax forces the Australian corporations, namely 300 of the worst polluting firms, to pay a $24 levy per tone of greenhouse gas produced. This levy sum is expected to increase each year, up until 2016, when a, ETS is projected to be implemented. The emission trading scheme would be devised in full accordance with the pollution cap and standards to be enforced by that day (Clean Energy Future 2012).

The measure was well supported by the environmental institutions and green supporters in the country, yet it is highly criticized by the political opposition. In fact, the opposition argues that, if and when, they come to role in the country, one of their first measures would be represented by the elimination of the carbon tax (BBC 2012).

The Australian example concerning introducing a carbon tax in order to regulate emissions perfectly exemplifies the strategies that a country would need to take so as for it to embark on a journey to reaching carbon neutrality. It is practically as if the Australian authorities want to make people realize that pollution is largely owed to people's activities and that it is essential for them to do something about it. Although it is difficult for it to achieve carbon neutrality in the near future, it is likely that such strategies pave the road to this objective.

A series of companies have recently turned their attention toward employing green attitudes, both in an attempt to save the world and in order to have the masses appreciate their thinking. Green marketing has come to be an important tool differentiating between successful companies and companies that gradually lose terrain as a result of their failure to act in accordance with laws imposed by the rest of the world.

According to Grace Dagher and Omar Itani (2012), companies need to focus on four Ps in order for them to experience financial benefits as a result of going green.

Products are one of the most important concepts in a company and in order for society to appreciate them they have to be environmentally friendly and even to provide solutions to environmental damage.

Price can be regulated by introducing a series of products that have varied levels of environmental friendliness, so as for more people to be able to get involved in saving the environment.

Place is an important factor, as companies need to promote online selling and to concentrate on providing distribution channels that have a very low negative effect on the environment.

Promotion is also significant in assisting a company that adopts environmental attitudes experience financial benefits. "Companies must use specific green marketing tools such as eco0lable and special sales promotions anxious for their corporate social responsibility)" (Dagher & Itani, 2012).

In order to be able to earn profits while putting across environmental attitudes, a company needs to be familiarized with green consumers. A green consumer is reluctant to purchase products that are damaging for people, animals, or for the environment as a whole. Products that require too much energy and produce very little benefits or that cause excessive waste are also likely to be avoided by green consumers (Dagher & Itani, 2012).

A great deal of companies has taken advantage of the fact that government support green attitudes and have started environmental programs meant to reduce their amount of emissions. "The 2009 economic stimulus package allocated billions of dollars to energy and environmental projects" (Vernon, 2009). Many firms actually fail to understand the fact that they can basically keep their profits and make even more as the government is providing them with funds needed for them to go green. This practically works as a 'help yourself while helping others' strategy. Companies are provided with finances required for them to go green and they upgrade their status at the same time. These firms virtually have to invest little to no finances in going green, taking into account that the authorities provide them with everything they need in order to be recognized for their environmental attitudes (Vernon, 2009).

Individuals are generally inclined to express confidence with regard to companies who adopt environmental attitudes, as these firms are perceived as being 'good'. "When firms' initiatives contribute positively to society, people acquire trust, feel protected, and ultimately buy firms' products, thereby improving companies' economic results" (Giovanni 272). This makes it possible for someone to understand how environmentalism can be particularly profitable, as individuals are inclined to express interest in firms that apparently want to help the world.

3. Carbon neutrality is a significantly notable trend in recent years and it involves having net zero carbon emissions. In order to do so, institutions focus on maintaining a balance between the amounts of carbon they emit and the amounts of carbon they filter. In particular cases companies need to purchase carbon credits in order to compensate for the difference, as only by doing so are they able to become carbon neutral.

While it is difficult to determine the exact number of companies that succeeded in becoming carbon neutral, it is nonetheless intriguing to consider how particular players have managed to achieve carbon neutrality, but refrain from publicizing their information. This makes it possible for the world to understand that there are numerous individuals who are concerned about the environment and who are determined to do everything in their power in order to prevent their companies from polluting nature (Who's Going "Carbon Neutral"?).

In order to gain a better understanding of carbon neutrality and the effect that it has had in recent years, one would have to learn more about how most companies have gotten actively involved in forming an united front meant to emphasize the importance of adopting environmental attitudes. This front is intended to lead to a society where carbon emissions are very low or even non-existent. Even with this, one of the most significant problems concerning the matter is that "there is no single, globally accepted standard for carbon neutrality and its constituents to be encompassed within this" (How should business approach carbon neutrality? 1). By learning how they can achieve carbon neutrality, firms are more likely to express interest in the concept. Energy efficiency is one of the most important concepts when regarding the issue, but it would be wrong to consider that achieving carbon neutrality is easy. Deciding to pursue the goal is an important decision for any firm, regardless of its finances, size, or reputation. Key management decisions need to be taken in order for the process to have an overall positive effect on the company, as doing otherwise would likely generate devastating consequence.

Most firms profit as a result of using energy and limiting their emissions would practically mean that they would have to reduce their profits. This is why it is extremely difficult for some companies to get involved in achieving carbon neutrality. Companies that prioritize energy reduction are typically among the bodies that use a large amount of energy and thus need to focus on adopting behaviors that would influence society in considering that they actually care about the environment. Even with this, this does not mean that these companies are in favor of carbon neutrality, as their involvement in environmental-related fields are considered to be enough to demonstrate that they are interested in preserving the natural world (How should business approach carbon neutrality? 2).

Industries that use lesser energy are probable to express interest in lowering their carbon emissions and to even achieve carbon neutrality. "British broadcaster Sky is an example of a firm fitting in this category that have decided to go carbon neutral, seeing scope to enhance their brand at relatively low cost" (How should business approach carbon neutrality? 2).

Another strategy to achieve carbon neutrality would be to contribute to "carbon-cutting projects through the U.N.'s Clean Development Mechanism" (Various 76). Three developed countries are already involved in a process meant to guarantee carbon neutrality: Norway (by 2030), New Zealand (by 2040), and Iceland (by 2050) (Various 76). It is certainly laudable to observe this, taking into account that directing one's attention toward carbon neutrality practically means that the respective body needs to devise a series of new methods meant to assist it in achieving progress in particular fields that require a large amount of energy.

A country does not necessarily have to be developed in order for it to achieve carbon neutrality. Although the masses typically associate developing countries with ideas regarding how it is impossible for them to refrain from releasing large amounts of carbon into the environment as a result of the fact that they are trying to experience more rapid progress, the reality is that developing countries can actually achieve carbon neutrality even faster than developed countries. Countries like the Maldives and Costa Rica expect to reach carbon neutrality in approximately ten years (Various 76). This makes it possible for society to comprehend that carbon neutrality is not necessarily a distant concept and that it can be achieved by virtually any body that is determined to reach it.

In order to be able to comprehend the complexity of carbon neutrality seen from the perspective of influential players from around the world, someone would have to think of developed countries as being similar to energy-intensive industries that find it difficult and almost impossible to achieve the goal. Major pollutants such as the U.S. And China expressed little interest in carbon neutrality, taking into account that this would significantly affect their profits (Ritzer 357).

Society needs to accept that dealing with carbon emissions is a costly activity and that it is very unlikely for a lot of countries to afford such a luxury. Even when considering environmentally-conscious countries like Norway matters are problematic. While it moved its carbon neutrality target to 2030 just recently, it appears that this is not a result of significantly reducing carbon emissions within its own borders, as it is really a consequence of the fact that the country has planted numerous trees and has cleaned up polluting factories in distant area from around the world. Carbon neutrality is a delicate topic and even though it appears that most countries are interested in achieving it, the reality is that it is extremely difficult for them to do so. "More importantly, it is not sustainable since there are just not enough trees to plant and factories to clean up in the less developed world to compensate for carbon emissions in developed (and some developing) countries" (Ritzer 357).

Carbon neutrality is rapidly becoming mandatory

Many companies in the contemporary society express interest in becoming carbon neutral because they are pressured in doing so, not necessarily because they are interested in protecting the environment. The reality is that these bodies are influenced to take on environmental attitudes as a result of "customer pressure, shareholder pressure, government regulatory pressure, and neighborhood and community group pressure" (Hernriques & Sadorsky 381). Most firms that are concerned about their future are probable to devise environmental strategies because they know that this is presently a key action in getting society to support them.

Doing good vs. doing well

As it is generally accepted, the majority of companies are dedicated at increasing profits regardless of costs. Even with the fact that many of these institutions also adopt ethics in doing business, it is difficult and almost impossible for them to refrain from considering finances as one of the most important concepts that they can possibly think of (Margolis, Elfenbein, & Walsh 3).

Throughout recent centuries companies have focused on adapting to a constantly changing business environment in order to be able to survive. Going green needs to be regarded from a similar point-of-view, as it is an action that needs to be taken in order for firms to be able to experience progress. Sooner or later everyone needs to change its sphere of influence in order to be able to act in agreement with the whole world by employing environmental attitudes (Margolis, Elfenbein, & Walsh 4).

If companies were to be provided with the impression that doing good can actually be connected to doing well, they would most probably direct their attention to both corporate social performance and corporate financial performance. "A positive link between social and financial performance would 5 legitimize corporate social performance on economic grounds, grounds that matter so much these days" (Margolis, Elfenbein, & Walsh 4-5). This would influence companies to express lesser interest in financial gain, as they would be educated regarding how it would also be in their best interest to attempt to act for the well-being of the social order.

Being carbon neutral is difficult

Although a great deal of managers acknowledge the benefits related to adopted green attitudes, the reality is that it is extremely difficult for their companies to go green. Tradition has made it possible for the whole world to understand that there is no connection whatsoever between the environment and financial profits (Walley and Whitehead 46). Throughout history, some of the most profitable companies have seriously harmed the environment in the process of earning large amounts of finances.

In spite of the fact that evidence shows otherwise, carbon neutrality has recently started to be regarded as an essential part of the idea of progress. "Being green is no longer a cost of doing business; it is a cataslyst for constant innovation, new market opportunity, and wealth creation" (Walley and Whitehead 46). A great deal of people have emphasized the fact that being green is in most occasions essential because it influences companies to acknowledge that it is possible for them to employ environmental-friendly attitudes and actually increase their profits as a consequence.

Companies are motivated by a series of concepts when deciding to become carbon neutral, but they mainly consider "reputation, issues, and compliance, in respect of sustainable business practice" (Reyers & Gouws & Blignaut 94). Most companies provide immediate and effective responses to stakeholder concerns and sustainability is among the most important matters when taking into account this concept. Wanting to be in agreement with international standards, to increase their reputation, and to be appreciated by stakeholders are some of the most significant reasons why companies decide to become carbon neutral.

While many prefer to believe that green attitudes increase profits, the truth is that this is actually little more than a popular idea. Managers from around the world have come across serious problems as they attempted to change their companies' policies toward the environment. "In fact, environmental costs at most companies are skyrocketing, with little economic payback in sight" (Walley and Whitehead 46). In addition to considering companies that find it particularly easy to adopt environmentalist images, one would also need to consider companies that are in charge of producing or commercializing petroleum-related products. These players virtually need to try and make it look as if they are interested in the environment while being directly responsible for hurting it.

It would be ignorant to claim that there do not exist companies that actually managed to profit as a result of going green. Even with this, one would also have to consider the fact that such cases are very rare and that the costs of environmental programs are probable to overshadow the profits that these respective companies associate with going green. Companies such as Texaco invest billions of dollars in environmental programs in spite of the fact that they know that such actions are likey to generate very little earnings (Walley and Whitehead 46).

Taking into account strategies implemented by Texaco, one can easily observe that win-win expectations should not actually be the most important ideas related to being environmentalist. As previously mentioned, such companies are pressured into adopting green attitudes as shareholders expect this from them. Even with the fact that no one can possibly prove that large investments are likely to generate positive financial return, companies are nonetheless focused on trying to get the general public to acknowledge that they are, in point of fact, struggling to keep up with a social order that is particularly determined to mobilize the whole world in fighting in order to protect the environment.

A company's development of an environmental strategy is heavily influenced by individuals that it has a close relationship with, such as shareholders, the government, and the local community. However, it appears that companies rarely yield to devising green plans when being pressured by non-governmental agencies. Firms who consider that conditions are going to worsen and that the environment is going to be damaged even more in the near future are more likely to get involved in investing resources in developing strategies that would reduce their amount of emissions (Hernriques & Sadorsky 392).

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