Sustainable Corporate World?

Who in the Corporate World is being Sustainable? By Christi Capazzo

“Going Green” and environmentally conscious moves are not usually associated with the green tinge of money, much less the money and profits of large companies and businesses. Yet corporations are making moves in the direction of sustainability because of concern over how the decline in resource availability will affect their future financial endeavors. This trend of “corporate sustainability” is becoming more popular as companies begin to take measures in assessing their environmental impact. Although economics and environmental efforts seem to be independent, the topic of corporate sustainability proves otherwise and shows the two ideas can go hand in hand. Ernst and Young reports that sustainability efforts and reporting are becoming incorporated into company practices. The task of measuring a company’s environmental impact is not easy especially since it is a relatively new practice and companies are not always sure about what internal functions to measure. The definition of sustainability varies from company to company as they lack “internal systems” with which to measure their impact, but input and suggestions are included now from stakeholders to customers to analysts. For corporations, sustainability involves many areas and in the business world it requires that “corporation’s long-term interests are intellectually and financially consistent with resource efficiency, proactive health and safety practices, and responsible leadership.” (Forbes) This is the definition of corporate sustainability in a nutshell. Despite the uncertainty in evaluating sustainability efforts, companies seem to benefit from it, especially in the stock market. Companies with policy on sustainability saw an increase on their share prices as reported by the Telegraph. Firms that violated environmental policy showed a noticeable fall in their company shares thereby showing that public opinion matters in market value. Corporate Knights is a media company based in Toronto, Ontario who refer to themselves as “The Company for Clean Capitalism” and create the yearly list called the Global 100 that measures the top sustainable companies in the world. The companies are measured by 12 key performance indicators including carbon productivity, waste productivity, energy productivity, and water productivity. They intend to be as encompassing as possible in their methods. The list includes companies such as Tim Hortons, Nestle, Coca-Cola, and L’Oreal. Sustainability involves companies being responsible now for evaluating many areas of function and performance. The six trends Ernst and Young reported are: tools for sustainability, the roles of chief financial officers (CFOs), employees as stakeholders, greenhouse gas reporting, awareness of business resource scarcity, and the value of rankings to company executives. It is an involved process. As the Forbes article states, by disclosing the reports of a company’s environmental and social practices, it makes need to be responsible and accountable because they are not behind closed doors. The Global 100 is a well-known and watched list in the business world and the competition to be on the list may act as a motivator for companies to increase their sustainability efforts. By having lists such as the Global 100, sustainability is given credibility. Corporate sustainability gives the environmental movement a practical application in a capitalist market where profit is what is emphasized over wisdom in resource use. However, resource decline is now driving companies to the sober realization that the world is not limitless. The United Nations has established their own Global Sustainability Report in accordance with their “ten principles in the areas of human rights, labor, the environment and anti-corruption” (UN Global Compact). The report receives participation from 1,712 companies worldwide. The snapshot they provide shows that companies have taken action in areas from life-cycle assessment and costing to water foot printing to eco-design. Lists and reports such as the UN Global Sustainability Report and Global 100 provide a glimpse into the international effort being put into sustainability. Economy and the environment are not independent but rather interdependent in the coming times. The increase in sustainable reporting and practice shows a bright point on the horizon for companies to continue with wiser practices that benefit both their profitability and tomorrow’s environment.

Sources: http://www.forbes.com/sites/jacquelynsmith/2014/01/22/the-worlds-most-sustainable-companies-of-2014/ http://www.telegraph.co.uk/finance/markets/11096221/Shares-prices-boosted-by-corporate-sustainabilitypolicies.html http://www.ey.com/US/en/Services/Specialty-Services/Climate-Change-and-Sustainability-Services/Sixgrowing-trends-in-corporate-sustainability_overview https://www.unglobalcompact.org/docs/about_the_gc/Global_Corporate_Sustainability_Snapshot2013.pdf