Yvon Chouinard

Jib Ellison

Rick Ridgeway

No one these days seriously denies the need for sustainable business practices. Even those concerned about only business and not the fate of the planet recognize that the viability of business itself depends on the resources of healthy ecosystems—fresh water, clean air, robust biodiversity, productive land—and on the stability of just societies. Happily, most of us also care about these things directly.

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Reprint: R1110B 
Like most holy grails, sustainability as a firm&#8217;s most dependable route to financial high performance has seemed a goal always beyond reach. The problem is simple. Businesses are rarely obliged to pay for the full toll their operations take on the world. Because many of these impacts have been hard to gauge with any precision&#8212;or to assign to individual businesses with fairness&#8212;their costs have remained external to businesses&#8217; accounting. That means it&#8217;s generally cheaper for consumers to buy a product that has a worse impact on the environment than the equivalent product that does less harm. But what if we could get to the point where the lowest-priced T-shirt was also the one doing the least harm to the planet and society? 
Three trends, each gathering force on its own, are now converging to make that goal a reality: (1) The values of many vital natural resources traditionally considered priceless are being quantified so that they can be factored into economic equations and individual firm&#8217;s accounting. (2) Socially responsible investing has matured beyond negative screening to become a value-seeking discipline generating positive impetus for change. (3) Industries are converging on standard indices for rating products&#8217; sustainability and seeking improvements throughout their value chains. 
Patagonia&#8217;s Yvon Chouinard and Rick Ridgeway team up with sustainability consultant Jib Ellison to explain those trends and how their convergence is driving a new era in sustainability. According to the authors, progress in each area spurs progress in the others, to the extent that the long-sought alignment of a firm&#8217;s prosperity with the best interests of the planet seems not only possible but inevitable.

The Sustainable Economy

Reprint: R1110B Like most holy grails, sustainability as a firm’s most dependable route to financial high performance has seemed a goal always beyond reach. The problem is simple. Businesses are rarely obliged to pay for the full toll their operations take on the world. Because many of these impacts have been hard to gauge with any precision—or to assign to individual businesses with fairness—their costs have remained external to businesses’ accounting. That means it’s generally cheaper for consumers to buy a product that has a worse impact on the environment than the equivalent product that does less harm. But what if we could get to the point where the lowest-priced T-shirt was also the one doing the least harm to the planet and society? Three trends, each gathering force on its own, are now converging to make that goal a reality: (1) The values of many vital natural resources traditionally considered priceless are being quantified so that they can be factored into economic equations and individual firm’s accounting. (2) Socially responsible investing has matured beyond negative screening to become a value-seeking discipline generating positive impetus for change. (3) Industries are converging on standard indices for rating products’ sustainability and seeking improvements throughout their value chains. Patagonia’s Yvon Chouinard and Rick Ridgeway team up with sustainability consultant Jib Ellison to explain those trends and how their convergence is driving a new era in sustainability. According to the authors, progress in each area spurs progress in the others, to the extent that the long-sought alignment of a firm’s prosperity with the best interests of the planet seems not only possible but inevitable.

The Sustainable Economy

Summary.

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