Aug. 14, 1997 Contact Pauline Austin (541) 346-3129 EUGENE--Contrary to conventional wisdom, businesses that pursue environmentally friendly strategies--so-called green companies--can expect profits to go up. That's the conclusion of a study co-authored by a UO business researcher and reported in the latest issue of the "Academy of Management Journal." Researchers looked at the track records--including profit and loss statements--of 243 firms over a two-year period. Companies that adopted higher environmental standards than required by government regulating agencies also posted higher profits than other firms in the study. Michael V. Russo, a professor of management at the University of Oregon's Charles H. Lundquist College of Business, co-authored the study with Paul Fouts, a UO student who recently completed his doctoral degree. "Executives who complain about the high cost of environmental protection might be better off focusing on the opportunities that greening offers," says Russo, who was lead researcher on the project. "While in many cases regulations drive costs up, our study found that on balance environmental stewardship had a positive overall effect on the bottom line." Companies that pursue environmentally friendly strategies benefit in several ways that offset costs, the researchers found. Green companies attract new customers because many consumers are eager to buy earth-friendly products. A reputation for being an environmental leader also can act as a magnet that attracts the best and the brightest workers to those firms. "People want to feel good about the firms they work for. We found that reputation is one of the strongest assets that green companies take to the market place," says Russo. Russo says green companies also benefit by their ability to anticipate new government pollution requirements. "Companies can follow a strategy of minimal compliance with pollution controls, or they can be on the cutting edge of pollution control technology," Russo explains. He says the firms that choose to be industry leaders save money in the long run because they are able to meet increasingly strict federal and local environmental protection standards--often before the regulations are imposed. They also tend to maintain organizational flexibility, which is valuable as innovative solutions become more prevalent. -30- #F-6063/Local,OrDailies,SBUS,PDX,PDX/Spcl,Special