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BREAKING

Greece May Be Cut by S&P

Sustainability = On the Agenda = Profits

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By Tom Randall

Two big questions about the ill-defined practice we call "sustainability:" 1) Are companies really doing it?; and 2) Can it make money?

The answer to both is yes, according to MIT Sloan Management Review and Boston Consulting Group. They surveyed more than 3,000 business managers and executives from 113 countries for their third annual report on corporate sustainability. While the survey does nothing to help define sustainability and how it should be measured, the results show that whatever "it" is, companies are totally into it.

Among the findings: A near-vertical climb, begun in 2004, for companies that report sustainability is on top managers’ agenda, as illustrated in the chart above. About 68 percent of companies said their organization's focus on sustainability increased in the past year, up from just 25 percent in 2009.

These efforts are increasingly paying off. Almost a third of companies said sustainable practices contributed directly to their bottom line last year. What's more, two-thirds of respondents said sustainability was necessary to being competitive, up from 55% last year.

Does any of this make the word "sustainability" less nebulous? Unfortunately, no. We're in the midst of rapidly increasing global demand for the world's strategic resources: fossil fuels, minerals, clean water, and talent, to name a few. Companies that acknowledge the risks and rewards of this great race respond to them in novel ways. That's sustainability, and the tools for investors to evaluate such efforts are still crude.

From a management perspective, though, yesterday's report shows it's no longer a question of whether a company can afford to "do" sustainability. The race is on, and it's time to put it on the agenda.

Visit www.bloomberg.com/sustainability for the latest from Bloomberg News about energy, natural resources and global business.

-0- Jan/25/2012 14:37 GMT