Sustainability and Competitiveness in the Renewable Energy Sector: The Case of Vestas Wind Systems

Vestas, a Danish company whose beginnings can be traced back to a blacksmith's workshop founded in 1898, has become the world market leader in wind turbine manufacturing. Between 1994 and 2001, Vestas's sales have increased more than tenfold, and the number of employees increased from 643 to 5,240. While its main contribution to sustainability may be seen as increasing the market share of wind energy, thus reducing the environmental impacts of electricity generation, the company has also become a leader in terms of internal environmental management and social sustainability. Until about a year ago, the company was also a phenomenal success story in financial terms, with a share price that would have provided investors participating in the 1998 IPO with a 778% return over a four-year period. Recent industry developments, however, are more challenging for Vestas, and it remains to be seen whether the company can take its success story to the next level. This paper presents key milestones in the company's development from niche to mass market and analyses success factors in the relationship between Vestas's sustainability performance and business competitiveness.