Presentation on Stuart Hart's Sustainable Value Matrix as a tool and framework for understanding corporate sustainability (for our Principles of Sustainable Management class 2013)

1. Triple Bottom Feeders
SUSTAINABLE VALUE

2. Not this Matrix!

3. 1997 Beyond Greening: Strategies for a Sustainable World
Hart, Harvard Business Review
1999 Global Sustainability and the Creative Destruction
of Industries Hart & Milstein, Sloan Management Review
2003 Creating Sustainable Value
Hart & Milstein, Academy of Management Executive
2007 Capitalism at the Crossroads (updated 2010)
Hart, Prentice Hall
First Articulation
Creative Destruction
Fully Developed
Integration
• Creators of Sustainable Value Matrix
• Professors of Management
• Business consultants
• Leaders in corporate sustainability
Stuart L. Hart
Mark B. Milstein
Historical Foundations

4. the triple bottom
line
Growth Path
& Trajectory
Cost & Risk
Reduction
Reputation &
Legitimacy
Innovation &
Repositioning
Internal External
Present
Say you’re an executive at a large, multinational, single bottom line company ….
The Sustainable Value Matrix
Future
• Makes the business case for sustainability
• Provides a clear path for doing this
VALUEVALUE
Business Drivers or Corporate Payoffs

5. Business Driver
Cost and risk reduction
Sustainability Driver
Environmental degradation
Business Strategy
Pollution prevention
Levi Strauss & Co Example
Energy and water reductions
Restricted Substance List
Reduced GHGs
Bottom Left Quadrant
Present, Internal
BASE of the
PYRAMID
POLLUTION
PREVENTION
PRODUCT
STEWARDSHI
P
CLEAN
TECH

6. Business Driver
Reputation & legitimacy
Sustainability Driver
Civil society stakeholders
Business Strategy
Product stewardship
Levi Strauss & Co Example
LCA (Care Tag for Our Planet)
Advocacy (BICEP)
Partnership w/Greenpeace
Bottom Right Quadrant
Present, External
BASE of the
PYRAMID
POLLUTION
PREVENTION
PRODUCT
STEWARDSHI
P
CLEAN
TECH

7. Business Driver
Innovation & repositioning
Sustainability Driver
Long-term health of the planet
Business Strategy
Clean tech
Levi Strauss & Co Example
Waste<Less jeans
Water<Less jeans
Top Left Quadrant
Future, Internal
BASE of the
PYRAMID
POLLUTION
PREVENTION
PRODUCT
STEWARDSHI
P
CLEAN
TECH

8. Business Driver
Growth Path & Trajectory
Sustainability Driver
Global poverty & inequity
Business Strategy
Base of the Pyramid (BoP)
Levi Strauss & Co Example
Factory workers’ rights & well-being
Foundation programs
Top Right Quadrant
Future, External
BASE of the
PYRAMID
POLLUTION
PREVENTION
PRODUCT
STEWARDSHI
P
CLEAN
TECH

9. Corporations that Act in all 4 Quadrants:
Minimize risk
Maximize shareholder value
Maximize positive social and environmental impacts
BASE of the
PYRAMID
POLLUTION
PREVENTION
PRODUCT
STEWARDSHI
P
CLEAN
TECH
What this all Means
The Sustainable Value Matrix
Internal External
Present
Future

10. Challenges
Top of the matrix
requires paradigm shift
Corporate imperialism

11. BoP 2.0
BoP 1.0: poor as consumers
BoP 2.0: poor as business partners
Green Leap
Marrying Clean Tech with BoP (top quadrants)
Breakthroughs

12. Conclusion
Establish future growth
by addressing the
needs of the world’s
poor through BoP
Improve reputation
and create legitimacy
through product
stewardship
Minimize risk & costs
through reduction of
pollution, waste, and
consumption
Innovate and reposition
for future disruptions
through clean tech