Stuart Hart, in his book Capitalism at the Crossroads: Aligning Business, Earth and Humanity , provides a simple framework for looking at the creation of Sustainable Value. The vertical axis in the framework refers to the organisation's need to manage today's business while simultaneously creating tomorrow's technology and markets; the horizontal axis reflects the organisation's need to develop internally while simultaneously engaging with its external environment. These axes define the four territories crucial to generating shareholder value:
- Enhancing Reputation and Legitimacy through Product Stewardship: Focusing on stake-holder engagement, transparency and life-cycle management, this involves enhancing the organisation's legitimacy by engaging external stake-holders (suppliers, customer, regul-ators, communities, NGOs, the media) in the conduct of ongoing operations. Life-cycle management extends the value chain beyond traditional limits by including in the firm's responsibility the costs and benefits of products from raw mat-erials to production and ultimately to disposal by consumers.
- Growing Profits and Reducing Risk through Pollution Prevention: This focuses on reducing waste and emissions from current operations, and so doing more with less. It includes seeking to reduce waste at the source or finding ways to use it as a valuable input to other processes. It has been this area which has to date provided the fastest way to increase shareholder value through reductions in cost and liability.
- Accelerating Innovation though Repositioning and Clean Technology: A sustainable business must be constantly mindful of generating the products and services of the future. This means developing or acquiring the skills, competencies and technologies that reposition the firm for future growth. Clean technologies are those emerging technologies that make today's energy- and material-intensive industries obsolete.
- Crystallising the Firm's Growth Path and Trajectory: The focus here is on identifying the needs that will define the growth markets of the future. Many of these needs arise from the increases in population, poverty and inequity associated with globalisation. Social development and wealth creation on a massive scale, especially amongst the world's poorest, is a key aspect of this quadrant.