How can it enable the simultaneous pursuit of green and business outcomes? An investigation of smart grid innovations

Sustainability has emerged as a key area of interest in response to a growing concern surrounding the adverse effects of pollution, such as climate change and health problems. Given these concerns, firms need to re-evaluate their traditional bottom line measures. We conceptualize production/distribution technologies (PDTs) and sense-making technologies (SMTs) as information technology (IT) innovations, whose combination allows firms to simultaneously achieve green and business outcomes. We focus on investments directed at PDTs and SMTs, which allows for a better understanding of the nature of the interdependencies between these two types of IT innovations. We propose the use of stochastic frontier analysis for business and green goals. We situate our study in the context of the U.S. Electric Utility Industry (EUI). This industry has been investing heavily in the Smart Grid over the past decade. Investments in the Smart Grid have been used to improve efficiency and facilitate environmental sustainability.