Page 78 - Design for Environment A Guide to Sustainable Product Development

Business Value Drivers 57

Category Element Definition
4. Shareholder Securing a competitive return
Value on investment, protecting the
Creation company’s assets, and enhanc-
ing the company’s reputation
and brand image through inte-
gration of sustainable develop-
ment thinking into business
Economic
practices.
5. Economic Building capacity for economic
Development development in the communi-
ties, regions, and countries in
which the company operates or
would like to operate.
6. Environmental Minimizing and striving to elimi-
Impact nate the adverse environmental
Reduction impacts associated with opera-
tions, products, and services.
Environ- 7. Natural Promoting the sustainable use
mental Resource of renewable natural resources
Protection and conservation and sustain-
able use of nonrenewable
natural resources, including
ecosystem services.

TABLE 4.2 Elements of Sustainable Development [8] (continued)

One of GEMI’s major contributions has been to establish a
business case for sustainability, including an understanding of how
intangible value drivers, such as leadership, brand equity, and human
capital, create shareholder value. Intangibles include people, rela-
tionships, skills, and ideas that add value but are not traditionally
ac counted for on the balance sheet. It is estimated that between 50%

and 90% of a company’s market value can be explained by intan-
gibles rather than traditional measures, such as earnings and tangible
assets [9]. As shown in Figure 4.3, there are three major pathways
whereby sustainability contributes to shareholder value.
1. Sustainable business practices can contribute directly to tan-
gible financial value by enabling top-line growth, reducing
operating costs, conserving capital, and decreasing risks.
For example, DuPont plans to expand into new markets by
developing products that focus on human safety and per-
sonal protection (see Chapter 13). Many companies are im -
plementing GHG emission reduction programs that will also
reduce energy costs.