Yale School of Management

Creating an Eco-Premium

A vision for environmental sustainability is not enough. Neither is a one-time report with a series of well-intentioned recommendations.

June 2, 2015

Instead, companies need to integrate sustainability into their core strategies to make it a viable part of their businesses, according to Daniel Esty, Hillhouse Professor of Environmental Law and Policy at the Yale Law School and Yale School of Forestry and Environmental Studies.

Esty spoke as a guest of the Economic Development Club earlier this year, outlining how some companies have made sustainability practices an “eco-premium.” Instead of simply increasing recycling efforts or adding other short-term agenda items, successful companies have found ways to make sustainability initiatives part of their long-term goals.

“This is what separates the new picture of going forward from the old view of sustainability,” Esty said.

This approach requires companies to be attentive to opportunities to become more environmentally efficient while cutting costs and risks, he said. When Dow began looking for ways to improve a key antibacterial chemical found in Unilever’s most popular soap, the company also considered how it could manufacture the chemical in a more environmentally sustainable way. In the end, the new formula also improved disinfection rates.

“From a sustainability point of view, this could improve public health the world over,” Esty said. “Dow really worked with Unilever to take this product to the next level.”

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About the author

Matthew O'Rourke

Senior Communications Writer