By Tima Bansal, Hadi Chapardar, and Joel Gehman Sustainability means balancing short- and long-term priorities. Published in MIT Sloan Management Review, Feb 17, 2016. http://sloanreview.mit.edu/article/tradeoffs-in-sustainability-oriented-innovations/

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Tradeoffs in Sustainability-Oriented
Innovations
Big Idea: Sustainability • Blog • February 17, 2016 • Reading Time: 3 min
Tima Bansal, Hadi Chapardar, and Joel Gehman
Sustainability means balancing short- and long-term priorities.
Jason Jay and colleagues have posted a series of articles that speak to sustainability-oriented
innovation (SOI). Their insights are rich and point to the value of SOI in creating value not only
for the firm, but for society. They suggest that seeing profit and planet as tradeoffs can constrain
innovation.
There is one aspect of their article that warrants further consideration. In addition to the profit-
versus-planet considerations highlighted by Jay and colleagues, another fundamental tradeoff in
sustainability is between the short term and the long term, or what we call “intertemporal
tradeoffs.” The differences are substantive, not just semantic.
The UN World Commission on Environment and Development’s 1987 document, Our Common
Future, notes that sustainability requires business and society to “meet the needs of the present
without compromising the ability of future generations to meet their own needs.” At the heart of
this definition is the notion of intergenerational equity, which requires intertemporal tradeoffs. If
sustainability is framed as a tradeoff between business and society, addressing this tradeoff for
the short term may sometimes exacerbate long-term problems — compromising sustainability.
Let’s look at this problem more closely. Natural resource systems impose the constraints that
create intertemporal tradeoffs. Natural resources renew at specific rates, so consuming too much
too quickly will disrupt natural systems, leaving less for future generations.
The simplest way to avoid disrupting these systems is by finding efficiencies in current
production processes. By using fewer resources, such as energy and physical materials, firms
will certainly find a win-win between profits and planet. However, by failing to consider
intertemporal tradeoffs, the wins to the firm in the short term may come at a cost to the planet in
the long term.
Jay, Gonzalez, and Swibel illustrate SOI through Nike’s FlyKnit. Instead of cutting materials to
make a shoe, Nike can now weave shoes from a single thread. The technology means less
material used and less material wasted. This process is good for the company because it saves
costs, and it is good for the planet because it leaves fossil fuels and materials in the ground.
But what if this technology led to the sale of more shoes, which then entered the waste stream
and were not recycled? The net impact on the planet could indeed be worse over the long term,
rather than better. Whereas Nike is creating less waste today, which is important, FlyKnit may

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not fundamentally address the long-term challenges that the family of products faces. Questions
still remain about the materials used for FlyKnit, future shoe models, the recycling process of the
used products, etc.
Here’s an example that hits the sustainability sweet spot, where the benefits that accrue in the
short term are more clearly aligned with the long term. BASF innovated shrink-wrap
packaging made of biodegradable polyester and corn starch-based polylactic acid that
biodegrades quickly in compost settings. This
property means that its waste is ecologically inert and
can re-enter the production stream more quickly by
exploiting natural resource processes. By focusing on
intertemporal tensions, BASF’s innovation is a
significant, enduring leap to solve the sustainability
problem of consuming paper cups and wrapping
materials.
We argue that intertemporal tradeoffs expose issues
and opportunities that could escape notice by focusing
solely on the profit–planet tradeoff. The profit-planet
tradeoff, which is how sustainability is usually
framed, can stimulate efficiencies. The intertemporal
tradeoff between the short and long term forces firms
to consider the temporalities of natural systems, vis-à-
vis materials use and production processes. By
integrating the profit-planet tradeoff with the short-
term vs. long-term tradeoff, companies will see
opportunities in new forms of energy and new
materials, as well as their use and reuse, that may
have been otherwise invisible.
Further Reading on Intertemporal Tradeoffs
Short on Time: Intertemporal Tensions in Business Sustainability, by Natalie Slawinski and
Pratima Bansal
Metatheoretical Perspectives on Sustainability Journeys: Evolutionary, Relational and
Durational, by Raghu Garud and Joel Gehman
ABOUT THE AUTHORS
Tima Bansal is the Canada Research Chair in Business Sustainability (Ivey Business School,
Western University, London, Canada) and founder and director of the Network for Business
Sustainability (www.nbs.net). Hadi Chapardar is a doctoral candidate at Ivey Business School,
Western University. Joel Gehman is an Assistant Professor at the Alberta School of Business.
REPRINT #: W40404
The profit–planet tradeoff, which is
how sustainability is usually framed,
can stimulate efficiencies. But
integrating it with a short-term vs.
long-term tradeoff can surface
opportunities that may have been
otherwise invisible.