Competitive environmental strategies: When does it pay to be green?

Proactive corporations have typically invested in increasingly ambitious sustainability initiatives. However, managers need to identify the circumstances favoring the generation of both public benefits and corporate profits. For some firms, better utilization of resources may result from some environment- related investments. For others, obtaining ISO 14001 certification or having some eco-labeled products can enable them to pursue competitive advantage. However, no one generic strategy makes business sense for all firms. This article presents a framework for categorizing generic types of competitive environmental strategies in order to help managers define and prioritize areas of organizational action, thus optimizing the overall economic return on environmental investments and making them into sources of competitive advantage.