Sustainability is Increasingly Core to Business Strategy, Says New Report

OAKLAND, Calif. and LONDON, January 31, 2017 /3BL Media/ — Companies and investors increasingly understand the fundamental importance of sustainable business and are taking action to reduce their environmental impacts, according to a new report.

“State of Green Business 2017,” published by GreenBiz Group in partnership with Trucost, is the 10th annual assessment of the progress by companies around the world in addressing their energy, waste, water, greenhouse gas and other impacts, and in increasing their sustainability investments, transparency and other leadership activities.

The report assesses the sustainability performance of U.S. companies in the S&P 500 index as well as those in the S&P Global 1200.

“In an increasingly complex business environment of growing resource use and climate concern, along with the uncertainties brought about by the 2016 U.S. elections, sustainable business faces a challenging future,” said GreenBiz Group Chairman and Executive Editor Joel Makower, the report’s lead author. “However, we’re seeing that the world’s largest companies remain steadfast in their sustainability commitments and achievements.”

Among the signs of progress:

• The price tag associated with natural capital impacts caused by companies — from resource extraction and emissions into the air, water and soil — was down over 15 percent since its peak in 2013, continuing a trend observed in the 2016 report.
• Total assets invested in the United States that consider environmental issues have grown 77-fold since 2010 and now exceed $7.79 trillion. The total value of green bonds offered to raise funds to support projects that have positive environmental benefits has grown 79-fold since 2012 and was valued at $38.4 billion in 2016.
• Nearly 60 percent of global stock exchanges have implemented, or are in the process of developing, environmental requirements for companies wanting to list with them impacting more than 50,000 companies listed on those exchanges.

On the negative side, the use of wind, solar and hydro by utility companies has stagnated and even regressed slightly since 2011. Meanwhile, companies’ current greenhouse gas-reduction projects account for less than 7.5 percent of what is needed to be achieved every year between now and 2050 in order to meet the climate goals set forth in the Paris Agreement.

“The fundamental fact is that we are still consuming natural capital — the limited stock of natural resources on which business and society depend for prosperity and well-being — at an alarming and unsustainable rate,” said Richard Mattison, CEO of Trucost, a division of S&P Dow Jones Indices. “Nearly half of the world’s 1,200 largest companies would be unprofitable if they had to pay their fair share of the $3.4 trillion in environmental and social costs of their resource consumption and pollution in 2015.”

The report also names 10 sustainable business trends for 2017, including the growing role of blockchain in company sustainability efforts, the growth of advanced materials that support companies’ circular economy ambitions, the notion that water can become an unlimited resource in a circular economy, and companies’ increased investments in improving their supply-chain partners’ environmental and social performance.

The free report can be downloaded at https://www.greenbiz.com/report/state-green-business-2017.