Sometimes ideas mix together in the email inbox like gin and olives – unrelated items that when brought together just make sense. Today’s example: two messages that, as one, describe what was arguably one of the most important shifts in business in 2012.  

The first take comes in the form of the Atlantic Wire’s “Year in Review: An A-to-Z Guide to 2012’s Worst Words.” Among the most detested? “Sustainable.” Their explanation: “Sustainable is the kind of word that ends up being co-opted and used by everyone to the point where it means nothing (See: Organic).” 

As deputy editor of sustainability news for, I have to say… fair enough. Corporate sustainability lacks definition. For UPS, it means swapping out delivery vehicles for more fuel-efficient models. At Apple, it’s about controlling e-waste and ensuring decent worker conditions at its suppliers. For McDonald’s, I’d be more concerned about product nutrition (or lack thereof) in the face of the obesity pandemic. It’s enough to make a journalist feel co-opted and used by everyone.

Sustainability means less and less as more and more companies use it more and more. It’s difficult to wrap such disparate industry-specific goals into the same heading and still have it convey anything meaningful. Yet that’s exactly what companies are trying to do with annual sustainability reports, which cover their environmental, social and governance (ESG) risks and opportunities. 

That brings me to the second email in my inbox today, a much less playful report: “2012 Corporate ESG/Sustainability /Responsibility Reporting: Does it Matter?” The study, published by the Governance & Accountability Institute in New York, has a similar finding with a different conclusion: 2012, it seems, is the year of "sustainability." And maybe that’s a good thing. 

This year 53 percent of S&P 500 companies disclosed environmental, social and governance data. That compares with about 20 percent of the S&P 500 in 2010. It's the first time that more than half of America’s top companies are reporting on sustainability.  

“What this means is if a company is in the S&P 500 and is not publishing a sustainability report, it is now in the minority,” the G&A Institute report says. “Most likely their peers and competitors are already reporting and enjoying certain benefits and advantages.”

Those benefits include an increased likelihood of being recognized by rating and ranking providers and equity index managers, as well as greater resilience after a recession. Even better, sustainability-reporting companies appear to get a premium from investors, and, over time, their stocks perform better. The five-year annualized return for S&P 500 companies that consistently report sustainability impacts is 3.9 percent, almost double the 2 percent return for everyone else. 

While the word "sustainable" has been almost comically overused, many of the efforts behind it are real. Investors increasingly realize there’s more to a company than its traditional financials, and the critical mass of companies paying attention to corporate sustainability is leading to sharper definitions of the field and a better understanding of just what it means for a business to be sustainable.

That makes “sustainability” begin to mean something. At this rate, maybe the word will be just a bit less abhorrent in 2013. Happy New Year.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE