Corporate Eco Impact Grows Even as Sustainability Efforts Widen
An iceberg breaks off from a snow-formed glacier in Greenland. Companies increasingly view climate change and access to water and natural resources as key risk factors. Photographer: Danita Delimont
Bloomberg BNA -- While corporations worldwide are adopting environmentally sustainable practices, unfortunately, their impacts on ecosystems continue to increase.
That's according to a new study detailed in a report, State of Green Business, released Feb. 12 and published by GreenBiz Group Inc. of Oakland, Calif.
The study measures the environmental efforts and impacts of 500 U.S. companies and more than 1,600 others from around the world. It tracks more than 30 metrics from greenhouse gas emissions to environmental research and development to assess whether companies are making progress in addressing environmental concerns.
This is the first time that aggregated reporting data has been done for such a large collection of sustainability metrics, Joel Makower, chairman and executive editor of GreenBiz Group, and the report's lead author, said in the report. It shows that despite the rapid rise of sustainability on companies' agendas, progress is lacking, particularly in light of the resource and weather risks many sectors are facing.
The report, which was published in association with Trucost Plc. of London, said that the financial costs to the environment caused by the companies covered in the study exceeded $1 trillion in 2011, surpassing pre-recession levels.
The 2011 total was arrived at by compiling each company's impact with its supply-chain vendors and then by factoring in carbon emissions, water consumption, and waste.
Companies increasingly view climate change and access to water and natural resources as key risk factors, particularly in an age where floods and droughts in one part of the world can upend supply chains globally, and where water scarcity is becoming a constraint to operations on nearly every continent, the report said.
The cost of protecting natural capital creates strategic opportunities for businesses that can optimize resource use through supply chains and deliver innovative products and services, Richard Mattison, chief executive of Trucost, said in the report.
Applying a financial value to natural capital impacts provides business context and will spur progress through increased engagement, he said.
Forward-thinking corporations can take the lead in preserving resources and finding ways to compete in a volatile economy, he said.
Some of the top 10 megatrends among corporations discussed in the report include:
- the growing interest in measuring natural capital in the form of environmental profit-and-loss statements;
- the rise of machine-to-machine communications, and the opportunities it brings to creating radical efficiency in buildings;
- the increased interest by investors in sustainability as a materiality issue; and
- the rise of sustainability-related apps for both consumer and business use.
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