Can Business Save the Earth?
Innovating Our Way to Sustainability
Michael Lenox and Aaron Chatterji


Contents and Abstracts
1 Business as Savior
chapter abstract

This chapter explains the threat posed by climate change and associated environmental issues and reflects on the prospects of the private sector being a key driver of formulating and implementing a solution. The chapter argues that business is neither a savior nor an enemy of the environment. Business can play a key role in addressing our sustainability challenges but only if we harness the broader system of inventors, managers, investors, customers, policy makers, and NGOs. Each of these actors will play a role in helping business save the Earth. Finally, this chapter outlines the organization for the remainder of the book.

2 Innovator as Genius
chapter abstract

This chapter explains how new technologies emerge and develop. Invention typically requires teams of talented individuals working step by step toward a larger goal rather than a single inventor with a flash of brilliance. The chapter explains how s-curves, open innovation strategies, markets for innovation, intellectual property rules, complementary technologies, and innovation ecosystems shape the emergence of new technologies. The chapter applies these general insights to charting the future of sustainable technologies. It includes several examples from transportation to solar energy to materials science.

3 Manager as Hero
chapter abstract

This chapter explores the role of corporate managers in commercializing innovations and creating compelling products. It argues that while well-known CEOs like Elon Musk are often portrayed as individualistic heroes, typical corporate leaders face numerous constraints. These include managing the expectations of shareholders and satisfying their board of directors. The chapter explores the conditions under which "green" business is good business, discussing the impact on supply chains, employees, and various cost drivers. The chapter also reflects on the role of CEOs as activists for public policies to address our sustainability challenges.

4 Investor as Visionary
chapter abstract

This chapter discusses the role investors can play in addressing our sustainability challenge. Since even the best innovations do not generate immediate returns, achieving sustainability will require investors to bet tens of billions of dollars on untested ideas. The chapter reviews the private financing of sustainable technologies, including venture capital investing. Socially responsible investing is discussed as one source of funding for sustainable technologies. Next, the chapter explains how debt and equity financing through public markets can serve as another mechanism for innovators to raise funding. Then the public funding of innovation is discussed in regard to government grants, loans, and infrastructure investments. The final section discusses philanthropic grants and the rise of sustainability-focused accelerators. The chapter concludes that all of these sources of capital will be required to develop the necessary level of technological and product development to meet our sustainability challenge.

5 Customer as King
chapter abstract

This chapter reviews the importance of the consumer in the success of sustainable technologies. It reviews insights from behavioral economics on how consumers make purchasing decisions and emphasizes the importance of the value spread between new technologies and existing alternatives. The chapter also explores the role of government as a customer, the potential for eco-labels to spur demand for sustainable products, and the influence on environmental regulation. The chapter concludes with a discussion of how activist groups can shape demand for sustainable products.

6 System as Catalyst
chapter abstract

This chapter summarizes the key arguments of the book and offers several specific recommendations for the different players in the system, including innovators, managers, investors, consumers, federal policy makers, state and local officials, activists and media, and foundations and NGOs. Using the example of Tesla, the chapter explains how the various parts of the system all need to work in concert to bring a truly transformative sustainable product to market. The chapter concludes with a call for a new "moon shot" to catalyze dramatic innovation across multiple sectors at the same time.