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Sustainability Programs

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Donald Baker:
Are they trendy fads setup just to please the environmentalists and climate change crowd, or is it a new viable business model companies have to invest in in order to leverage a competitive advantage?

Phidippides:
Try this test:

1) Does the move increase profitability through an avenue that is not related to public relations? 

If yes, then it may be an new viable business model.  If no, then it is a fad and likely not a viable business model.

Donald Baker:
If a firm depends on government contracts who make it a point to award bids to firms who have such programs, then yes it would be a viable business model.

Phidippides:
And if the cost of starting/maintaining such a sustainability program were more than any revenue generated via the government contracts, would it still be a viable business model?

And what if the political winds change and the government either stops awarding contracts based on such programs, or makes the requirements even more stringent, costing the company even more to comply?

I think the bottom line is that corporate sustainability programs are not necessary components of viable business models across the board.  Yes, in some industries, they *can* help indirectly in the generation of revenue, but they are not the primary drivers of it.  A company that invests too heavily in such programs in the hope that it will lead to more contracts should tread carefully; had the investment gone to some other purpose, such as product design or salaries, would the return have been greater?  Possibly.

By the way, I take back what I said about them being "fads".  A fad is something different.   

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