Strategic resources are the assets, capabilities, organizational processes, information, and knowledge that enable a company to conceive of and implement strategies that improve its efficiency and effectiveness in ways that are difficult for competitors to mimic. Strategic resources for environmental strategy include capacities for identifying opportunities for environmental improvements, analyzing and engaging stakeholders, managing channels for capturing value from stakeholders, and ensuring credibility with stakeholders. Transaction costs internal to companies can also inhibit companies from developing and implementing an environmental strategy. Companies may not adopt value-enhancing innovations because managers lack sufficient information and incentives to implement them. Company culture and structures that enhance the flow of information across functional units and incentivize innovation can increase the effectiveness of value-enhancing environmental improvements. Effective chief sustainability officers enhance communication across functional units. Understanding strategic resources’ role in developing and implementing environmental strategy helps identify when a company is ill-suited for what otherwise appears to be a promising environmental opportunity.

Not every potential environmental improvement is an opportunity for a successful environmental strategy. Success depends on the strategy’s fit with stakeholder demand, channels to capture value from stakeholders, and credibility assurances that the company’s environmental achievements are genuine, as well as its alignment with the company’s overall strategy and strategic resources. The case of Nike’s Considered sustainability initiatives illustrates environmental strategy’s promise and pitfalls. Nike’s Considered Boot was launched to considerable acclaim and received international awards for its advanced sustainability design. The Considered Boot’s rugged look clashed with the sleek styling and performance features that typified the Nike brand and offered few other benefits that enticed consumers. As Nike withdrew the Considered Boot from consumer markets, it leveraged its advanced apparel design expertise to develop more sustainable features for products and to produce tools for measuring products’ sustainability. By making these features and tools public, Nike helped its environmental group stakeholders assess environmental performance throughout the apparel industry. Nike thus aligned its environmental strategy with its nonmarket strategy by allowing environmental groups to pressure competitors to improve their performance to standards Nike had already achieved, thereby raising competitors’ costs.