When it comes to sustainability, firms usually take one of two routes. Some act pre-emptively. Others act reactively. Our new paper shows both routes can support firm growth. Paper: https://bit.ly/share-X Thread

These approaches are often seen as opposites. But we find they are two ways of building the same thing: strong environmental capabilities — essentially, how good a firm is at handling environmental challenges consistently over time.

As firms build these capabilities, a lot improves internally. They learn faster, adapt better to change, innovate more effectively, and work better with partners and stakeholders. Over time, this becomes part of how the firm operates — not just a side initiative.

When environmental capabilities become deeply embedded, firms are more likely to build sustained competitive advantage — which, in our study, shows up as stronger firm growth over time.

At the core, environmental capabilities rely on three abilities: learning fast, adjusting quickly, and turning ideas into real solutions. Firms strong in these areas usually respond faster to shocks, make better long-term bets, and spot new opportunities earlier.

Big picture: There isn’t just one path to sustainability success. Firms can get there by acting early or by innovating when pushed. What matters is building capabilities to learn, adapt, and innovate continuously. Firms that do this well often become greener and stronger. Ends