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Making the Business Case for Water Sustainability
 
 

Making the business case for pursuing a water strategy often involves comparing the benefits and costs of taking action. The lists below summarizes several major areas of benefits and costs that tool users should consider.
 

Benefits of Action > Costs of Action = Business Case

Benefits

  • Direct savings from action (operating cost reductions)
  • Reduced risk
    • Avoided costs or disruption
    • Secured "license" to operate or grow
  • Enhanced revenues
    • Improved competitive advantage for existing products & services
    • New products & services
  • Enhanced relationships with critical customers
    • Suppliers and distributors
    • Financial Institutions
    • Employees
    • Regulators
    • Customers and shareholders
    • Neighbors and communities
  • Broadened future options for business action

Costs

  • Direct costs of action
    • Staff time and resources
    • Technology, equipment, and materials
  • Opportunity costs (cost of capital)


Even where there is a business case to be made (i.e., the benefits outweigh the costs), action is not assured. Initiatives typically must compete against a broad range of other corporate initiatives for allocation of limited organizational resources and staff attention.
 

Additional Resources

Additional resources are listed below which can be helpful for assessing and articulating the business case for environmental initiatives.

Total Cost Accounting

GEMI. 1998. Environment: Value to Business. Washington, D.C.

This document contains guidance to help companies identify and evaluate costs and benefits associated with environmental activities.

U.S. EPA Environmental Accounting Initiative

This website contains numerous publications and tools to assist companies in incorporating environmental benefits and costs into business decision-making.

Real Options and Corporate Decision-Making

Martha Amram and Nalin Kulatilaka. 1999. Real Options: Managing Strategic Investment in an Uncertain World. Boston: Harvard Business School Press.

This book provides an excellent introduction to "real options" and contains a useful bibliography related to company investment decision-making in the context of uncertainty.

See http://www.real-options.com for more information on evaluation of real options for organizational decision-making.

Making the Business Case

GEMI. 1998. Environment: Value to Business. Washington, D.C.

GEMI. 2001. Environment: Value to the Top Line. Washington, D.C.

Bob Willard. 2002. The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line. Gabriola Island, B.C., Canada: New Society Publishers.

This book includes spreadsheet tools to assist business leaders in establishing the business case for sustainability initiatives.

 

ResourcesReturn to Module 4