Journal of Business Ethics (2009) 85:97–109
DOI 10.1007/s10551-008-9950-6
Pragmatic Sustainability: Translating
Environmental Ethics into Competitive
Advantage
ABSTRACT. In this article, I propose a business para-
digm that allows and enables the integration of environ-
mental ethics into business decisions while creating a
competitive advantage through the use of an ethical
framework based on classical American pragmatism.
Environmental ethics could be useful as an alternative
paradigm for business ethics by offering new perspectives
and methodologies to grant consideration of the natural
environment. An approach based on classical American
pragmatism provides a superior framework for businesses
by focusing on experimentation and innovation, driving a
long-term focus, and providing actionable clarity. Under
a pragmatic approach to ethics, the choice for sustain-
ability becomes self-evident for business performance and
moral reasons.
KEY WORDS: pragmaticism, sustainability, environ-
mental, business ethics, competitive advantage
Introduction
You are a Senior Manager in charge of plant quality
and productivity for a publicly-traded international
paper company, Titan Paper. Titan produces 45% of
Jeffrey G. York is a research assistant at the Batten Institute at
the University of Virginia’s Darden School of Business and is
a Ph.D. candidate in Entrepreneurship, Business Ethics and
Strategy. He holds a bachelor’s degree in Journalism from the
University of Georgia and an MBA from the University of
Tennessee, where he focused on new venture analysis. His
work is focused on studying the nexus of environmental
opportunities with entrepreneurial solutions. Jeffrey’s past
work experience includes consulting for business incubators,
management in a Fortune 500 corporation, and leading the
startup of a whitewater rafting company.

Springer 2008
Jeffrey G. York
the paper stock used in the United States for a
variety of purposes, including milk and orange juice
cartons, cereal boxes, and other packaged consumer
goods. You are in the midst of your annual bud-
geting process for next year’s plant improvements,
and a particular plant is causing you a dilemma. The
plant operates at an annual profit of $180 million per
year, employs 1,245 local residents, and produces
25% of Titan’s annual production. The bad news is
that the plant also produces dioxin, a known car-
cinogen, through its paper bleaching process. Dioxin
is deposited in the local river in amounts below
federal and state limits. However, in a small com-
munity downstream, there have been 167 reports of
cancer in a population of 1,025 over the past 5 years.
This has drawn the attention of environmental
groups and multiple protests have ensued. Titan has
developed a technology known as bleach filtration
recycling (BFR) that would reduce the total effluent
by 85% and eliminate all dioxin outflow. However,
BFR has never been implemented, and estimates for
the cost of the test pilot run to $70 million with an
annual reduction of operating costs of only $5
million. The BFR pilot proposal is not supported by
your manager or shareholders in general. What
should you do?
Overview of argument
The fictionalized case above is loosely based on the
book Troubled Waters: Champion International and
the Pigeon River Controversy (Bartlett, 1995). For the
sake of brevity, I have condensed the facts of the case,
but it illustrates the trade-offs and difficult decisions
faced by business managers every day. It is difficult at
this point for anybody, even middle-managers faced
98 Jeffrey G. York
with a litany of issues to deal with on a daily basis, to
deny the looming impact of environmental issues on
our society and in business. Economic development
is often cited as the cause of many of the environ-
mental issues our society faces, including global
warming, ozone decline, nuclear radiation, industrial
toxins, and widespread air and water pollution
(Shrivastava, 2000; United Nations, 1999, 2004). In
recent years, environmental awareness has increased
at every level of society; however, in business set-
tings, the perception persists that there is always a
trade-off to be made between profits and the envi-
ronment (Porter and van der Linde, 1995). Business
leaders often express the desire to ‘‘do the right
thing,’’ but offer a laundry list of reasons their hands
are tied:
• ‘‘Our customers simply don’t buy green
products.’’
• ‘‘It has to be profitable first; we don’t green
for the sake of green.’’
• ‘‘If our shareholders actually cared about
these issues, there would be more focus on
them.’’
• ‘‘We’ve tried green products, but they sim-
ply weren’t purchased.’’
• ‘‘Adopting this approach puts us at a com-
petitive disadvantage.’’
These were just a few of the comments heard at a
recent roundtable on sustainable chemistry from
senior managers from Fortune 500 companies. It is
easy for the environmentalist to complain that
business people simply don’t get it, or that business
managers are shallow, short-sighted, or even worse,
unethical. The actions of deep ecology-based social
groups such as Earth First! and the Earth Liberation
Front (ELF) and riots during the 1999 World Trade
Organization in Seattle have demonstrated that it
will no longer be enough for corporations to operate
within the legal boundaries of environmental regu-
lation; they will be expected to proactively address
their ecological footprint. Unfortunately, these
confrontations simply push business people and
environmentalists into the tired old circle of ‘‘envi-
ronment versus business’’ and perpetuate myths on
both sides. Ethical theories often reinforce the
business versus environment story, perpetuating
separation between economic and environmental
goods (Alexander, 2007). This unnecessary conflict
keeps us from moving forward with a better
understanding of environmental problems, and
makes solutions seem unobtainable.
What if the issue is not so much that business
people don’t care about the impact of their actions
on the environment, but that the arguments from
those best informed on these issues are framing the
discussion in a language that business cannot even
understand? Could we move to a framework that
would help managers take the environment into
account when making business decisions?
The argument for the intrinsic value of nature in
and of itself often falls on deaf ears in a business
setting. Although more and more businesses are
adapting a values based model and expanding their
view to include all stakeholders, not simply share-
holders, the reality for the people who actually make
the day-to-day decisions in the corporate world is that
they operate within the paradigm of shareholder pri-
macy; if a decision does not directly create shareholder
value, it will simply not be made. While many man-
agers intuitively understand and sympathize with the
environmental movement, deontological arguments
for the sanctity of wilderness or non-anthropocentric
arguments for the rights of animals are not only inef-
fective in changing the behavior of businesses, but are
also not understood in the decision-making context.
We might as well walk into an Earth First! rally and
discuss discounted cash flow analysis or lean opera-
tions management. Although these worlds may con-
verge some day, according to the best data we have on
the environmental crisis, we simply may not have the
time to wait.
So, how can the discussion of environmental
issues best be had with business leaders? I argue that
environmentalists, regulators, ethicists, and business
leaders who seek to provoke change within existing
corporations can best frame their arguments using
classical American pragmatism as the guiding ethical
framework. When I refer to pragmatism in this
paper, I am referring to the philosophical stance
represented by the work of John Dewey, William
James, and Charles Peirce; I will rely on Rosenthal’s
argument that the writings of these philosophers, as
well as C. I. Lewis and G. H. Mead, can be
understood as a system of thought and ethics
(Rosenthal, 1986), while I will use specific writings
 Translating Environmental Ethics into Competitive Advantage
from James, Peirce, and Dewey to support specific
arguments. For the sake of simplicity, I will refer to
the overarching ideology common to these writers
as simply ‘‘pragmatism’’ and identify the specific
writer when exploring a particular concept. Another
term I will use in this paper that has been the source
of much confusion and controversy is ‘‘sustainablity’’
(van Marrewijk, 2003). For the purpose of this
paper, a sustainable decision is one which will ‘‘meet
the needs of the present without compromising the
ability of future generations to meet their own
needs’’ as defined by the World Commission on
Environment and Development (WCED), an inde-
pendent body established by the United Nations
(WCED, 1987). Although we could debate the
meaning of this term for pages, I will not do so in
this paper; suffice it to say I view decisions and views
that promote sustainability to also be positive for the
natural environment.
The goal of this paper is to outline a business
paradigm that allows and enables the integration of
environmental ethics into business decisions while
creating competitive advantage through the use of a
decision-making framework based on pragmatism.
My argument will proceed as follows:
1. By integrating consideration of the natural
environment, businesses can create superior
performance. Multiple examples are now
available to demonstrate this pattern. How-
ever, the basis for environmentally beneficial
decisions can be very different, and is often
not based on principle driven ethics, but
rather on regulation or consumer-based eco-
nomic pressure.
2. Environmental ethics as a field of philosophy
can offer a new paradigm for business ethics
as a field and business practitioners by offering
new perspectives and methodologies to grant
consideration of the natural environment. A
pragmatic approach provides a superior
framework for businesses by offering the fol-
lowing ideas:
• Pragmatism focuses on experimentation and
innovation – The key to unlocking the mys-
tery of profitable sustainability lies in innova-
tion. Pragmatism proposes a perspective that
remains continuously open to experimentation
99
and new ideas. While not degenerating into
relativism, a pragmatic approach to environ-
mental issues can break down stereotypical
thought patterns and open the door for new
ideas.
• Pragmatic morality encompasses an approach
to problem solving that considers both means
and ends, ensuring a long-term focus – Cor-
porations are focused on outcomes; they are
driven by, founded on, and focused around
the consequences, primarily financial, of the
decisions they make. By introducing environ-
mental decision making within a framework
that considers the consequences of a decision
from an empirical and character-developing
perspective, we are already much closer to
speaking the everyday language of business.
• Pragmatism is clear, actionable, and evolu-
tionary. Pragmatism, as a philosophical frame-
work, can provide refreshing clarity and
the ability to clearly take action. For any
framework to operate in the difficult and
murky intersection between business and the
environment, it must at least be understand-
able to allow movement toward easy imple-
mentation. A pragmatic approach will make
the choice for sustainability self-evident; it
requires no complex or difficult arguments.
Theoretical development
Competitive advantage through environmental actions
From the blooming of concerns about pollution
during the 1960s, business leaders have to a large
extent viewed ‘‘dealing with’’ the natural environ-
ment as a cost of doing business, an externality of
production (Porter and van der Linde, 1995). Sel-
dom, if ever, were environmental issues viewed as an
opportunity to expand and grow a business, to think
about innovation in an entirely new way, or to dif-
ferentiate a company in the minds of consumers. In
the past 10–15 years, the tide has started to shift. No
longer are the examples of environmental consider-
ations in business confined to the cliched Ben &
Jerry’s and Body Shops of the world (although,
100 Jeffrey G. York
clearly, there is still a place and always will be for
start-ups incorporating the environment into their
values.) We have seen a global shift in awareness of
environmental impact among some of the largest
corporations who are creating true, measurable
competitive advantage by addressing environmental
issues, both through cost savings and increased
revenue.
For example, 3M is a global, publicly traded cor-
poration that produces a wide array of industrial and
consumer products. In 2004, the company had a net
income of $2.99 billion, employed 67,071 people in
60 countries, and began celebrations for the thirtieth
anniversary of its Pollution Prevention Pays (3P)
program (3M, 2004). From 1975 to 1989, 3M saved
over $500 million through this program, while pre-
venting 500,000 tons of pollution (Shrivastava, 1995);
today, the company puts its total cost savings at $1
billion and pollution prevention at 2.2 billion pounds
(3M, 2004). As demonstrated by a split-adjusted stock
price increase from $1.96 to $77.86 over the past
30 years, this commitment does not appear to have
inhibited 3M’s competitiveness; in fact, CEO W.
James McNerny cites ‘‘a combination of solid top-
line growth combined with continued improvement
in operational efficiency,’’ which has been driven to a
large extent by the 3P program (3M, 2004).
While 3M has had a longtime commitment to
sustainability, the commitment has been powered
primarily by economic, not ethical drivers. Every 3P
project must demonstrate significant cost savings,
and the company maintains a fanatical focus on
operational efficiency through its six-Sigma program
as well. While savings have driven 3M’s ecological
success story, other companies are driven by
potential profits.
Proctor and Gamble, another large mainstream
company, which operates in 53 countries and
employs over 106,000, has made environmentalism a
more recent aspect of its strategy. The foundation of
the P&G story is not around cost savings, although
those have surely been realized. As a company that
knows its products are in nearly every home in
America and around the world, P&G has quickly
responded to customers’ desires for more environ-
mentally safe packaging and products (Shrivastava,
2000). This initial action has led to a company-wide
program, Total Quality Environmental Management
(TQEM).
Another driver can be the vision of a charismatic
leader, who has made the environment a part of
their, and thus, the company’s, mission. Patagonia, a
privately held outdoor clothing and equipment
company, was founded in 1970 by Yvon Chouinard,
an avid mountain climber and surfer who began the
company making and selling pitons, the pins used by
climbers to secure their ropes. The company evolved
over time to a clothing line targeted at a variety of
outdoor enthusiasts. Chouinard maintains a strong
personal commitment to sustainable practices (he
lives in a house made entirely of re-claimed mate-
rials) and has led his company down a similar path.
Patagonia differentiated itself when in 1994 they
shifted to all organic cotton, becoming the only
clothing manufacturer of their size and distribution
to do so. Through this and a variety of other envi-
ronmental initiatives, the company has maintained a
commitment to reducing its natural footprint, not
for cost reduction or preferential marketing (which
they do reap the benefits of), but because of the
culture that has grown around their founder’s love
for and commitment to the natural environment.
While these examples are exciting and demon-
strate the power of ecological consideration as part of
business strategy, the drivers are quite different. At
3M, the value of innovation and the view that the
company exists to solve problems leads to the con-
sideration of the environment as a way to further
that mission. At P&G, sustainable packaging is
driven by consumer demand, and at Patagonia, the
culture is based around environmentalism. Each
company is responding to different external
problems through different means and adapting in
different ways. We need not worry so much about
why these companies chose their individual paths,
but how other businesses can make the choice to
pursue sustainability despite a wide variety of
products, cultures, and values. Environmental ethics
has offered a path within the realms of philosophy;
the question now is how this philosophical stance
can best be extended to the business realm.
Environmental ethics and business
Since the publication of Aldo Leopold’s A Sand
County Almanac in 1949, and arguably before, a rich
sub-field of ethical studies termed ‘‘environmental
 Translating Environmental Ethics into Competitive Advantage
ethics’’ has emerged. The overriding project of the
sub-field has been to somehow extend the tradi-
tional anthropocentric field of ethics to provide
moral standing to non-human entities including
animals, plants, and ecosystems. The various frame-
works of environmental ethics have provided an
array of approaches to this project, which include the
extension of existing ethical frameworks such as
Bentham’s utilitarianism (including, of course, his
allusions to the rights of animals), or Kant’s cate-
gorical imperative. Other examples are based on
virtue ethics focused on sustainable decisions and the
emergence of environmental pragmatism (Gurdorf
and Hutchingson, 2003). I will examine each of these
approaches to environmental ethics, and show why
pragmatism offers the clearest approach for dealing
with business decisions.
Many environmental ethicists have taken the
foundational approach of either utilitarianism or
deontology and extended these traditional ethics to
include the consideration of non-human species.
The animal liberation movement is a well-known
extension of the utilitarian argument that takes
Bentham’s statement of ‘‘The question is not, Can
they reason? nor Can they talk? But Can they
suffer?’’ as its rallying cry (Bentham, 1789, 1982).
Through this extension, equal rights are granted to
all sentient creatures as part of the utilitarian calculus
of the greatest happiness for the greatest number; the
argument is that we must avoid ‘‘speciesism’’ by
bringing the pain and suffering into our realm of
moral concern (Singer, 2001). While this could be a
useful framework for consideration of business issues
on the margin, such as animal testing or food pro-
duction, the extension does not go far enough to be
truly relevant to most managers. This version of
utilitarian thinking can also be used to justify large
scale environmental degradation. For example, the
increased numbers of snow geese in recent years has
led to widespread damage to private property such as
golf courses, farms, and other ventures, as well as
actively destroyed wetland habitats (Johnson, 1997).
Under the non-anthropocentric extension of utili-
tarianism, we make the individual suffering of geese
our primary concern, leading to a poor outcome for
private industry, the ecosystem, and ironically, the
geese themselves.
From a managerial perspective, similar issues arise
with the extension of ‘‘rights’’ to non-human
101
entities in the form of extending Kant’s categorical
imperative. The Kantian argument that we must
treat all members of humanity as ends rather than
means (Kant, 1785, 1997) is extended in several
environmental ethics to include ‘‘rights’’ for animals,
plants, and ecosystems (Gurdorf and Hutchingson,
2003). This concept is taken to its logical extension
by Holmes Rolston III when he states that Earth,
and the ecosystems inherent in it, are not only
worthy of duty and objective value, but are the
ultimate object duty ‘‘short of God, if God exists’’
(Rolston, 2002). While the duty we humans have to
the larger environment is an admirable maxim, from
a business standpoint, it is difficult at best to inter-
nalize this paradigm within a specific business strat-
egy. An environmental ethic based on principles of
intrinsic value is difficult for any manager to com-
prehend, much less to act upon. While the deon-
tological argument resonates with environmentalists,
conservationists, and others who have a core emo-
tional attachment to the value of natural objects in-
and-of themselves, such an ethic can lead to a moral
quagmire for the business manager. This valuation of
‘‘wild and pristine’’ wilderness can smack of elitism
and disconnectedness from the environmental
problems prevalent in the actual setting of business,
large metropolitan areas (Light, 2001). Also, by
placing environmental resources as ‘‘beyond value’’
and as meta-ethical principles outside the realm of
financial consideration, a deontological approach to
environmental ethics can itself be in direct opposi-
tion to the world of business, because it constrains
strategies by non-goal related criteria; while this is
fine for an ethical stance, it does not leave us much
to work with while integrating environmental issues
into the fabric of business planning.
While utilitarianism focuses on the consequences
for the involved parties and deontology focuses on
the inherent principle upon which an act is com-
mitted, virtue ethics is primarily concerned with the
actor’s moral development. Virtue ethics is tradi-
tionally related to the Aristotelian concept of human
character being formed by habits, and evaluates these
habits according to their tendency to move the actor
toward his telos or purpose (Aristotle, c. 330 B.C.,
1999). For the purpose of environmental ethics, the
preservation of the environment must become one
of the ‘‘virtues’’ or habits that lead humans to
achieving a state of eudaimonia (happiness and
102 Jeffrey G. York
fulfillment). In other words, humans must develop a
character that leads to good environmental decisions.
The extension of virtue ethics to encompass the
environment seems to be most readily accomplished
by including care for the natural environment within
the virtues loyalty and benevolence (Welchman,
1999). It seems that following the linkages necessary,
from traditional virtue ethics all the way through to
specific issues concerning nature, or at least recon-
structed to be concerning nature, would be a diffi-
cult framework for business decisions. All decisions
would be based on the principles of ‘‘character’’ and
the development of virtuous character with regard to
the environment. Again, while admirable from a
theoretical standpoint, it is difficult to see how an
environmental virtue ethics framework alone would
be effectively applied in a business setting to envi-
ronmental decisions. Certainly, the development of
one’s character should be considered, and is within a
pragmatic system; however, in issues as complex as
the choices managers face in environmental issues,
reducing the question to one of character would
seem a vast oversimplification.
All of the environmental ethics perspectives dis-
cussed thus far are based on the extension of an
existing ethic to non-humans. In our quest for a new
paradigm, perhaps the most interesting perspective is
offered from eco-centrism and deep ecology. Real-
izing the inherent difficulty of extending an
anthropocentric model, some environmental ethi-
cists have taken a new path, and based their ethic
around the belief that humans are nothing more than
the components of their relationship with nature.
Deep ecologists view the earth as a living system,
which we have no right to inflict harm upon. This
nexus view, as we shall see, comes very close to the
views of pragmatism regarding the individual and the
community. However, it seems unlikely that busi-
ness practitioners, no matter how open-minded, will
rush to embrace the concept that humans are
meaningless other than their role in supporting the
larger ecosystem; the obvious end conclusion is that
all business activities are immoral and should cease.
How then can we merge the fields of environmental
ethics into the decision framework within which
business operates? Perhaps, we should turn to envi-
ronmental pragmatism, defined by environmental
ethicists as ‘‘the open-ended inquiry into the real life
problems of humanity’s relationship with the envi-
ronment’’ (Light, 1999).
The classical American pragmatic framework will
is an effective tool in bringing environmental con-
sideration to bear in the realm of business decisions.
The use of pragmatic decision making would
inherently lead to the consideration of ecological
issues within the decision-making process while
fostering competitive advantage. Through the
implementation of pragmatic moral principles,
managers can create better outcomes for their com-
pany and the environment in which it operates. In
order to make this nexus clear, I will relate prag-
matism to the strategic decision-making process, and
demonstrate exactly how the relationship would
improve both the deliberation and the outcomes. It
will be helpful to offer a brief overview on my
assumptions around the business decision process.
Making business decisions: the strategic planning process
Any choice that has a significant impact on a business
and the world around it can be seen as a strategic
choice. Strategic choices are those made to help the
firm achieve its defined purpose, according to the
values it wants to perpetuate. As such, strategy is not
a simple matter of what tactics to employ, but a
question of how the firm will develop and maintain
competitive advantage (Clawson, 2003; Porter and
Kramer, 2006; Porter and van der Linde, 1995). For
the purpose of this paper, we will simplify compet-
itive advantage to be derived from two sources.
Competitive advantage can be gained from either
differentiated cost savings, in other words, the ability
to produce the same goods at a reduced cost relative
to the competition, or from increased revenue
attained by access to new markets, or preferential
treatment by current customers.
Making the business case for investments, partic-
ularly ones that alter conventional strategy, always
combines financial arguments with strategic ratio-
nales. Positioning a company for future growth
requires adapting financial models. In other words,
once models are built, the company’s strategy staff
works with the finance managers to adapt them
to desired future strategic outcomes. Imaginative
strategic thinking about creating future market
 Translating Environmental Ethics into Competitive Advantage
dominance, with a clear understanding of risks and
financial downsides, leads to market differentiation
and new market creation.
When managers are faced with decisions that
include an element of environmental impact (i.e., to
expand R&D in compostable materials, ensure that
products meet or exceed regulatory requirements,
and define standards for environmental improve-
ment), they will intuitively utilize financial measures
to determine success. Given this reality, we must
seek to define environmental questions in a manner
that allows for the consideration of these factors
within a business context. As we continue to treat
environmental goods (clean air, water, timber, etc.)
as common goods, they cannot be factored into the
equation of a business decision other than from a
moral perspective. Unfortunately, the moral per-
spective of business can be very different as busi-
nesses are not individuals but large organizations
within which multiple individuals make decisions
with environmental impacts every day. This is why
pragmatic deliberation is the appropriate paradigm
for business decisions which include environmental
considerations.
Pragmatic strategic planning
The pragmatic approach allows us to shed the
weight of utilitarian or deontological principles and
rather focus directly on the task at hand. Pragmatism
argues against the concept of ideology on immov-
able principles, but rather embraces an approach of
multi-perspective pluralism, which allows the inte-
gration and valuation of multiple perspectives. These
1. New,
Disruptive Data
(Problem or
Challenge)
2. Starting Point
• Personal &
historical
“principles” based
on experience
Figure 1. Pragmatic process of reflective thought.
103
perspectives are driven by the cultural inheritance of
the actor, the other members of the community, and
experiences from which they have established prin-
ciples. The moral role of each individual is to begin
with the societal norms ‘‘embedded as they are in
institutions and in the habits of life’’ as a hypothesis
for testing, not to assume ‘‘they are imbedded in the
nature of things’’ (Dewey, 1934, 1998). In deciding
which perspectives to value, workability is the main
criteria; we should begin with our current values,
but continuously question whether these ideas help
us in moving toward our stated goals (Rosenthal and
Bucholz, 2000).
The pragmatic approach to decision making
involves a process of constantly evaluating and
evolving our personal perspective and seeking to
ensure accommodation of the broader community’s
perspective. Pragmatism does not embrace moral
relativity and simply says ‘‘anything goes’’ from an
ethical perspective; rather, it is focused on main-
taining and building upon our historical knowledge
while constantly questioning our assumptions
and beliefs in light of new information. Figure 1
illustrates this process.1
Dewey described this process as a reflective
thought in which ‘‘active, persistent, and careful
consideration of any belief or supposed form of
knowledge in the light of the grounds that support
it, and the further conclusions to which it tends,’’
is used in the process of making any decision
(Dewey, 1910, 1997). Pragmatism does not give us
an immovable set of principles to fall back on when
making decisions; it requires us to engage in careful
and sincere deliberation when making decisions. It
will not tell us what to think, but how to think.
5. Adjust or 5. Deny New
Amend Previously Principles
Held Principle
or
4. Potential
New
Principles
3. Broad
Consideration
104 Jeffrey G. York
A common objection to this form of decision
making is that it is no ethic at all; we are simply
deciding to do what we want to do. This is a mis-
understanding of the pragmatic decision-making
process, and is based on the objector’s belief that
there is a separate ‘‘truth’’ or ‘‘principle’’ outside of
our existence. It must be remembered that prag-
matism rejects this concept. As James wrote, the
truth is nothing more than the concept that:
… Ideas (which themselves are but part of our expe-
rience) become true just in so far as they help us to get
into satisfactory relation with other parts of our
experience … Any idea upon which we can ride …
any idea that will carry us prosperously from any one
part of our experience to any other part, linking things
satisfactorily, working securely, simplifying, saving
labor; is true for just so much, true in so far forth, true
instrumentally (James, 1896, 1997).
From a pragmatist perspective, the moral point of
decision making is twofold:
1. Make the choice that gives us the optimal
chances of valuable (promoting harmonious
decisions by accommodating multiple per-
spectives) experiences in the future, and
2. Make the choice that aligns with the person
we want to become (Rosenthal and Bucholz,
2000).
Thus, a pragmatically moral decision cannot be
based on a single principle, no matter how grand it
may be; it is based on the imaginative grasp of the
possibilities and deep sensitivity to the nexus of past
and future relationships that surround an issue. As
decisions are made, habits are formed producing a
character or the type of person we become. Peirce
described the function of thought as ‘‘to produce
habits of action; and that whatever purpose there is
connected with a thought, but irrelevant to its
purpose, is an accretion to it, but has not part of it’’
(Peirce, 1878, 1997). In other words, while we
should engage in wide consideration of perspectives
and consequences, the point is always to define our
ability to act. The question now facing us is how
then the elements of pragmatic ethics encourage the
ability of business decision makers to include envi-
ronmental issues within their decision.
Experimentation and innovation
A unifying concept of pragmatist writing is a
relentless focus on experimentation (Rosenthal and
Bucholz, 2000). Only by constantly challenging our
assumptions and trying different ideas can we arrive
at the optimum answer. For the pragmatist, the
morality of a decision does not exist in a separate
reality from the decision; the morality comes to exist
through the decision-making process. By embrac-
ing this value of experimentation, business man-
agers could treat decisions in an entirely different
manner.
For decisions to pursue the sustainable path of
business development to take place within an existing
firm, there must be an atmosphere of openness to
experimentation (van Marrewijk, 2003), especially
if there is any hope of garnering competitive
advantage. By definition, competitive advantage will
only emerge from activities that differentiate a firm,
hence, they will not be what everyone else is doing.
When focusing on environmental issues, the built-in
false dichotomy between profits and sustainability
makes this gap even larger. Therefore, the openness
to new ideas that is fundamental to the pragmatic
approach is absolutely essential for a business to
pursue a greener path.
What does this look like within a business? We
need look no further than our familiar example of
3M. Two of the company’s values: ‘‘Innovation;
‘Though Shalt not kill a new product idea’’’ and
‘‘Respect for individual initiative’’ (Collins and
Porras, 1994) offer a clear implementation. When
a business environment is founded around, and
performance is measured by, innovation, true
imaginative thought can exist.
Pragmatic decision making, as described above,
includes the process of utilizing the imagination and
emotion in the process. By encouraging managers to
expand their decision-making capacity beyond a
shallow version of rationality, this mode of decision
making can open up the practitioner to a new realm
of unconsidered possibilities, a deeper, and more
truly rational way to solve problems. Through the
process of examining current principles, opening
ourselves to new ideas, and then accepting or
rejecting those concepts, the process of decision
making is more considerate and comprehensive.
 Translating Environmental Ethics into Competitive Advantage
In addition, by adopting a pragmatic approach to
environmental decisions, business practitioners would
open themselves to alliances and partnerships with a
wide array of stakeholder groups. Although it is un-
likely that business leaders, conservationists, and deep
ecologists will ever come to agreement on the first
principles of environmental value judgments, they
may very well agree to a specific goal. This sharing of a
common goal is what allows businesses to progress
and to make meaningful decisions which consider
environmental impacts (Stead and Stead, 2000).
Means and ends considered
The pragmatic perspective does not lock the deci-
sion maker into a specified ‘‘truth’’ forever defined
in principles that must not change. The very foun-
dation of pragmatic thought was based heavily
around moving out of the paradigm of the utilitar-
ianism versus deontology. In the process of making a
morally correct decision, the pragmatist will be
encouraged to consider and carefully weigh both the
reasoning, empirically grounded in reality, and be-
liefs, driven by the community (including the actor)
driving her decision as well as the possible conse-
quences. Dewey described this as ‘‘Genesis and ends
are of equal importance, but their import is that of
terms of boundaries which delimit a history, thereby
rendering it capable of description’’ (Dewey, 1940,
1998). Through equal consideration, we can tap into
something primordial and beyond what either pre-
vious forms of reasoning offer us. Business decisions
confront the duality between ends and means from
their very nature; when considered from a traditional
framework, there is a false tension in considering the
moral path against the most profitable path. In a
pragmatic framework, there is no tension because
both must be carefully considered.
From a pragmatic perspective, the best outcome
to a decision is the one which helps us move forward
and accomplish our goals while becoming what we
intend to be. According to James, decisions are best
made by expanding the set of ‘‘living options’’ as
wide as possible when ‘‘the stake is significant’’ and
when we cannot reverse our mistakes (James, 1896,
1997). This perspective could be extremely useful
for inspiring sustainable decision making; by the
nature of the issues we are dealing with, they are
focused on future consequences of decisions made
today on the environment. Because we are dealing
105
with the future, there can be no proof of what will
happen until the events have actually transpired.
Combine this with the disagreement among scientists
around issues such as global warming and resource
depletion, and you have a situation that is at best
confusing to a business practitioner and not intrinsically
motivational for expanding their realm of concern.
Pragmatism cuts the knot of unknowable futures
by allowing us to refine our beliefs as needed to deal
with the situation at hand. James must be quoted at
length on this cornerstone of pragmatic thought:
Our passional nature not only lawfully may, but must, decide
an option between propositions, whenever it is a genuine
option that cannot by its nature be decided on intellectual
grounds; for to say, under such circumstances, ‘‘Do not decide,
but leave the question open,’’ is itself a passional decision-just
like yes and no, – and is attended with the same risk of losing
the truth.
There are, then, cases where a fact cannot come to be at
all unless a preliminary faith exists in its coming. And
where faith in a fact can help create a fact, that would be an
insane logic which should say that faith running ahead
of scientific evidence is the ‘‘lowest kind of immoral-
ity’’ into which a thinking being can fall.
In truths dependent on our action, then, faith based on
desire is certainly a lawful and possibly and indispens-
able thing. (James, 1896, 1997, p. 77–87, emphasis in
original)
Pragmatic decision making focuses on the consid-
eration of currently known ‘‘facts’’ and the future
consequences they may have. It is not essential that
business people wait on the sidelines for the debate
around climate change to be settled, for new legisla-
tion to be passed, and for technology to provide
solutions. Managers can choose to believe that the
environmental crisis is an issue worthy of consider-
ation and begin creating innovation today. Even in the
case where the decision maker doesn’t morally believe
that the environment is worthy of consideration, the
fact of looming legislation, increasing concern among
consumers, and rising costs of factors of production
can lead to an environmentally friendly decision. If it
can be demonstrated that believing the environmental
crisis is real enables better decision making and allows a
company to evolve into what it seeks to be, it is en-
ough to satisfy the requirements of the pragmatic
environmental ethicist, and it is enough to satisfy most
106 Jeffrey G. York
business practitioners. By ignoring the possibility of
environmental degradation, business leaders are sim-
ply making decisions without including relevant
information, which is a surefire recipe for competitive
destruction (Freeman et al., 1999).
Clarity and actionability
Descriptions of classical American pragmatic thought
can be a bit difficult and complex, but in imple-
mentation, a pragmatic ethic regarding the envi-
ronment can be clear and actionable for managers.
Pragmatic sustainability simply requires the princi-
ples of careful, collaborative consideration of the
elements of any decision, including the natural
environment. To a large extent, the adoption of
pragmatism is asking ourselves to simply accept the
way we think and to embrace our own intuitive
process of decision making (Menand, 1997).
Business decisions must deal with consequences; as
discussed previously, businesses only exist to achieve
their stated goals. These may include perpetuation of
the firm, delivering shareholder value, or ensuring
consideration of all stakeholders. Regardless of the
particular focus of the business, the financial impact of
a decision will be considered. Rather than shunting
financial impacts to the side and relying on ideals that
must be adhered to, a pragmatic sustainability ethic
would allow businesses to continue to include the
estimation of financial impacts within consideration of
environmental choices. Although many environ-
mentalists will argue that environmental goods are
beyond value and thus cannot be part of cost–benefit
analysis, this argument, when applied in a business
setting, ignores the fundamental reality of corporate
operations. A pragmatic approach allows not only the
current methodology of financial considerations to
continue, but by casting a wider net for information
and utilizing the imaginative and emotional capabili-
ties of decision makers, could breathe fresh air into the
traditional financial measures framework.
Let us consider a traditional financial measure
for corporate strategic decisions, Economic Value
Added (EVA).2
EVA is a commonly used method to report on
value created during a given time period (quarterly,
annually, etc.) and is typically used as a ‘‘top down’’
measure of the entire company’s performance
(Harris, 1997). The equation is EVA = (ROIC -
WACC) X invested capital. ROIC stands for return
on invested capital and WACC refers to weighted
average cost of capital.
Three levers in this formula that can be used to
analyze investment in sustainable business choices
are:
1. Increased ROIC – Driven up by increased
revenues from sales or reduced costs from
improvements to your operations.
2. Decreased WACC – Driven down by de-
creased risk in the eyes of lenders.
3. Increased Capital Availability – Expanded
sources of capital availability through a
widened pool of funding availability.
How would a pragmatic approach to consider-
ation of EVA differ from the traditional business
approach? Without the pragmatic environmental
framework, the consideration of environmental
goods is completely left out. Precisely, because clean
air, fresh water, renewable resources, and a sustain-
able environment are ‘‘priceless’’ resources, they are
also considered valueless resources within a financial
calculation. However, by adopting a pragmatic
environmental approach, the sphere of consideration
will become inherently more creative and
acknowledge the complexity of the decision process.
Looking simply at the components of EVA, we can
draw examples of how a pragmatic consideration of
environmental issues could reveal value that was
previously left on the table while leading to a more
sustainable decision.
Pragmatic sustainability EVA
By employing the broader powers of her imagina-
tion and carefully reflecting on the broader impli-
cation of her EVA calculation, the manager
practicing pragmatic sustainability could find hidden
sources of value:
• Differentiated Cost Savings: The ability to pro-
duce the same product as your competition
at a lower cost. Willard (Willard, 2002) has
provided a useful framework for considering
the cost/benefit of sustainability, including,
but not limited to:
 Translating Environmental Ethics into Competitive Advantage 107

a. Reduced Operating & Manufacturing Ex- Hi

Systemic Avoidance Hypothesized
penses – Derived from reuse, waste reduc- of Issues, however Competitive
tion, and reduced resource consumption may be short-term Advantage
focused or inflexible stemming from:
(water, electricity, packaging, etc.).
Waste Reduction
b. Risk Reduction – Includes legal, regulatory, Innovation
and social risks from environmental and Customer Preference

health issues.
c. Decreased Employee Expense – Increased pro-
ductivity and retention, reduced recruiting
expenses because employees feel they work at a
‘‘good’’ company that aligns with their values.
• Increased Revenue and Market Share: Obtained
through differentiation and preferred access
to markets inaccessible to competitors. These
may include, but are not limited to:
a. Access to Markets – Access to previously, or
soon to be, inaccessible markets can be
improved through environmentally friendly
products.
b. Preferential Purchasing – Current customers
may be retained through passing the cost sav-
ings generated in production through the
supply chain.
c. Increased Innovation – Pragmatic Sustainabil-
ity thinking can serve as an impetus for inno-
vation; the company that figures out how to
comply, and even be in advance of, regula-
tion better, faster, and cheaper will have a
competitive advantage.
By taking a truly pragmatic financial approach,
not the constricted view we sometimes identify as
‘‘pragmatic,’’ we can see the possibilities that emerge
in the most concrete and consequential financial
calculations. As pragmatism embraces evolution, a
pragmatic ethic would allow for the incorporation of
expanded consideration of the natural environment
across all business operations. Can we imagine what
possibilities might come to exist in the realms of
strategy, marketing, and operations, and what future
this might create? The opportunity for creating
competitive advantage is there for firms that move
quickly to outpace rivals and the regulatory envi-
ronment to create lasting, values-based relationships
within their supply chain and customers. The pos-
sible movement and my overall argument are sum-
marized in Figure 2.
Environmental
Anthropocentric
Values, could miss
opportunities related
to natural
environment
Low
“Business as Usual”
Low High
Values Basis
Figure 2. Potential movement to create competitive
advantage.
Decision time at Titan
Let’s return to the situation of Titan Paper Com-
pany. As you will recall, as a Senior Manager, you
are making the decision to attempt a pilot of BFR, a
system that will significantly reduce the environ-
mental degradation caused by one of your most
profitable plants. Unfortunately, the project is a
financial loser. Or, is it?
Let’s say that in the months since you initially
realized the predicament you were in, Titan has
rolled out new set of values:
• Innovation is our life, thus,
• We are always willing to be open and chal-
lenge the status quo.
• We make the best decision possible through
careful consideration.
• We deal in reality and the best information
available.
• Every situation is unique and requires that
we take in all perspectives.
Because you want to do well and be promoted,
you have done your best to take these values to
heart. Looking at the BFR situation, a new set of
questions start to emerge in your mind. Is there a
108 Jeffrey G. York
way of demonstrating the profitability of BFR be-
sides the cost savings within the plant’s operations?
What about the litigation Titan could avoid, the
potential recreational use of the river, the ability to
avoid a ‘‘fire drill’’ when new regulations (as they
invariably do) come around? Could Titan garner
favorable press and turn the entire PR nightmare
around? What value might that have? What kind of a
future would be created if BFR actually works?
Could Titan license the technology? Does any of it
really matter; should we just do BFR because in this
situation, profits are not the only way to make the
choice?
There are a hundred other questions that could be
asked; the point is that the decision-making envi-
ronment can be altered by implementing a set of
pragmatic values, a simple, small set at that. By the
way, did you notice that none of these values even
mentioned the environment? In the spirit of
pragmatic inquiry, I’ll leave the final decision on
BFR open. Hopefully, the new possibilities opened
are enough to move the conversation forward, and
move businesses toward pragmatic sustainability.
Notes
1 Dewey: Pragmatism, Education, and Democracy, Vol. 1
The author would like to thank John Mcvea for
his explanation of this process during a seminar on
Dewey in 2005.
2
Portions of the following section previously
appeared in Archer et al. (2008).
Acknowledgment
The author would like to gratefully acknowledge help-
ful comments received on an earlier draft of this paper
by Willis Jenkins, Pat Werhane, and Stasi York and the
support of the Batten Institute at the Darden Graduate
School of Business in conducting this research.
References
3M: 2004, ‘2004 Annual Report’.
Alexander, J.: 2007, ‘Environmental Sustainability
Versus Profit Maximization: Overcoming Systemic
Constraints on Implementing Normatively Preferable
Alternatives’, Journal of Business Ethics 76(2), 155–162.
Archer, G., A. Larson, M. White and J. York: 2008,
‘Sustainable EVA: Green Chemistry Links of Financial
Analysis and Business Strategy’, in J. Stoner and C.
Wankel (eds.), Innovative Approaches to Global Sustain-
ability (Palgrave-Macmillan, New York, NY).
Aristotle. c. 330 B. C., 1999, Nicomachean Ethics (Hackett
Publishing Company, Indianapolis, Indiana) 2nd
Edition (T. Irwin, Trans.).
Bartlett, R. A.: 1995, Troubled Waters: Champion Interna-
tional and the Pigeon River Controversy (The University
of Tennessee Press, Knoxville).
Bentham, J.: 1789, 1982, An Introduction to the Principles of
Morals and Legislations (Oxford University Press, New
York).
Clawson, J. G.: 2003, Level Three Leadership: Getting Below
the Surface (Pearson Education, Inc., Upper Saddle
Rive, NJ).
Collins, J. C. and J. I. Porras: 1994, Built to Last (Harper
Collins Publishers, New York).
Dewey, J.: 1910, 1997, How We Think (Dover Publica-
tion, New York).
Dewey, J.: 1934, 1998, ‘Art as Experience’, in L. A.
Hickman and T. M. Alexander (eds.), The Essential
Dewey: Pragmatism, Education, and Democracy, Vol. 1
(Indiana University Press, Bloomington), pp. 391–400.
Dewey, J.: 1940, 1998, ‘Nature in Experience’, in L. A.
Hickman and T. M. Alexander (eds.), The Essential
(Indiana University Press, Bloomington), pp. 154–161.
Freeman, R. E., J. Pierce and R. H. Dodd: 1999, Envi-
ronmentalism and the New Logic of Business (Oxford
University Press, New York, NY).
Gurdorf, C. E. and J. E. Hutchingson: 2003, Boundaries:
A Casebook in Environmental Ethics (Georgetown
University Press, Washington, DC).
Harris, R. S.: 1997, Value Creation, Net Present Value and
Economic Profit (The University of Virginia, Darden
School Foundation, Charlottesville, VA).
James, W.: 1896, 1997, ‘The Will to Believe’, in
L. Menand (ed.), Pragmatism: A Reader (Random
House, Toronto).
Johnson, M.: 1997. ‘The Snow Goose Population
Problem’. Northern Prairie Wildlife Research Center
Home Page.
Kant, I.: 1785, 1997, Groundwork of the Metaphysics of
Morals (Cambridge University Press, Cambridge, UK).
Light, A.: 1999, Environmental Pragmatism (Routledge,
Abingdon).
Light, A.: 2001, ‘The Urban Blind Spot in Environmental
Ethics’, Environmental Politics 10(1), 7–35.
 Translating Environmental Ethics into Competitive Advantage
Menand, L.: 1997, ‘An Introduction to Pragmatism’, in
L. Menand (ed.), Pragmatism: A Reader (Random
House, Toronto).
Peirce, C.: 1878, 1997, ‘How to Make Our Ideas Clear’,
in L. Menand (ed.), Pragmatism: A Reader (Random
House, Toronto), pp. 26–48.
Porter, M. E. and M. R. Kramer: 2006, ‘Strategy and
Society: The Link Between Competitive Advantage
and Corporate Social Responsibility’, Harvard Business
Review 84(12), 78–92.
Porter, M. E. and C. van der Linde: 1995, ‘Toward a
New Conception of the Environment–Competitive-
ness Relationship’, The Journal of Economic Perspectives
9(4), 97–118.
Rolston, H.: 2002, ‘Value in Nature and the Nature of
Value’, in A. Light and H. Rolston (eds.), Environ-
mental Ethics: An Anthology (Blackwell Publishers,
Oxford).
Rosenthal, S. B.: 1986, Speculative Pragmatism (The
University of Massachusetts Press, Amherst).
Rosenthal, S. B. and R. A. Bucholz: 2000, Rethinking
Business Ethics: A Pragmatic Approach (Oxford University
Press, New York).
Shrivastava, P.: 1995, ‘The Role of Corporations in
Achieving Ecological Sustainability’, The Academy of
Management Review 20(4), 936–960.
Shrivastava, P.: 2000, ‘Ecocentering Strategic Manage-
ment’, Society for Business Ethics, Environmental Chal-
lenges to Business: Ruffin Series No. 2, pp. 23–43.
109
Singer, P.: 2001, Animal Liberation (Harper Perennial,
New York).
Stead, J. G. and E. Stead: 2000, ‘Eco-Enterprise Strategy:
Standing for Sustainability’, Journal of Business Ethics
24(4), 313–329.
United Nations: 1999. ‘UNEP Global Environmental
Outlook 2000’.
United Nations: 2004. ‘UNEP Annual Report 2004’.
van Marrewijk, M.: 2003, ‘Concepts and Definitions of
CSR and Corporate Sustainability: Between Agency
and Communion’, Journal of Business Ethics 44(2),
95–105.
WCED: 1987, Our Common Future (United Nations,
Oxford, UK).
Welchman, J.: 1999, ‘The Virtues of Stewardship’,
Environmental Ethics 21(4), 411–423.
Willard, B.: 2002, The Sustainability Advantage: Seven
Business Case Benefits for a Triple Bottom Line (New
Society Publishers, Gabriola Island, BC).
Darden Graduate School of Business,
University of Virginia,
Charlottesville, VA, U.S.A.
E-mail: Yorkj05@darden.virgina.edu