Environment: Value to the Top Line
Environment: Value to the Top Line builds upon the work of an earlier GEMI primer, Environment: Value to Business (EVTB). The central theme of EVTB was the strong connection between environmental activities and business value, the bottom line. Companies have made great strides in finding ways for environmental considerations to deliver operational or bottom line value: reduced operating cost, increased resource efficiency and improved time to market. Top line value or revenue growth was introduced, but explored to a lesser degree. This tool fits well into the growing universe of GEMI reports and publications dedicated to exploring the business value of environmental activities throughout the distribution chain and in connection with a company’s role with respect to society and the environment.
EVTL is intended to provide inspiration and ideas for senior managers, including product and business development managers, business process owners, regional managers, environmental managers, investor relations staff and senior executives.
The term “top line” refers to what is represented by the top line of an operating or income statement: sales. The Top Line Framework explores the implications of these two dimensions—core strengths and company strategy—for delivering environmental top line value. For purposes of this document, top line value will consist of the following elements: revenues or sales; market share growth; share price; and enhanced brand. The tool consists of five chapters as outlined below:
- Chapter 1 deals with companies whose strategy is to realize immediate revenue gains and whose core strength is product innovation. These companies are inclined to develop products that solve their customers’ environmental problems by either lowering customer environmental costs or increasing customer environmental benefits.
- Chapter 2 deals with companies whose strategy is to grow market share through promotion of brand image and whose strength is in product innovation. These companies tend to develop environmentally responsible products—products or services that are produced with, or whose use involves, less environmental impact than those of competitors.
- Chapter 3 deals with companies whose strategy is brand driven and whose strength is in customer and other stakeholder relationships. These companies tend to promote environmental initiatives as a way of enhancing their brand.
- Chapter 4 deals with companies whose strategy is immediate revenue driven and whose strength is in relationships. These companies tend to find ways to bundle environmental services with their products, or replace products with services, as a way to provide the best total solution to customers.
- Chapter 5 sets forth steps for companies to consider as they move ahead with initiatives to realize environmental top line value