Increasingly, firms are integrating environmental sustainability into their business strategies. Yet, sustainability is a complex topic and many firms need to form environmental partnerships to access additional resources-in the form of investments, technologies, expertise, public image, and/or political influence-to develop competitive advantage. Environmental partnership decisions are difficult, however, because they often need to reconcile multifaceted sustainability issues with multi-level, and potentially divergent, strategic goals. To meet their intended objectives, companies should carefully consider the type of environmental partnerships and partners that can best meet their needs. Based on a review of the literature, interviews with executives responsible for environmental partnerships, and publicly available data, we find firms engage in three main types of environmental partnerships: innovation-seeking, legitimacy-building, and policy-influencing. Each type of partnership benefits from different types of resources and partner choices. Herein, we describe the advantages of each type of environmental partnership and partners that may best support them. Given that many firms develop environmental partnership portfolios, managing multiple environmental partnerships simultaneously, we also discuss the implications of our research for environmental partnership portfolios.

This is an MIT Sloan Management Review article. Companies are surprisingly obtuse, the authors say, when it comes to the formation of new alliances. What often happens is that a business unit will form a partnership that serves its own parochial interests. All too often, however, the value that such alliances add at the business-unit level is negated by the resulting harm to the company due to the incompatibility of the new alliance with existing ones. Forming a partnership with a company that is an arch rival of an existing partner, for instance, can create such ill will that it leads to the overall destruction of value in the company. The solution, the authors argue, lies in both structure and process: Companies should create a central "alliance function"-an individual or a department at the corporate level that is charged with overseeing and coordinating the formation of new alliances. And the decision of whether to enter into a proposed alliance should be subject to a rigorous set of analytical steps in which the company examines the costs and benefits of the proposed alliance, not only for the business unit that is directly involved but also for the company as a whole.