Top 10 Sustainability Trends 2013


GreenBiz.com recently launched their sixth annual State of Green Business 2013 report.  Partnering with leading research firm, Trucost, this year’s report has enhanced data and a greater global scope.   Trucost works to place a value on the natural capital and a price on pollution and use of resources.  Many of the companies analyzed report cost savings and greater innovation through better supply-chain resource management. Environmental research and development by S&P 500 companies has more than doubled in the past five years, despite the down economy. The top 10 trends highlighted in this year’s report are:  

1. Companies Take Stock of Natural Capital: The Earth’s natural resources have long been taken for granted or viewed as “free” (like breathable air).  Businesses are increasingly looking for ways to measure and manage natural capital and consider the potential material risks for resource shortages, water quality, storm damage and supply chain disruption. One outcome of Rio+20 was the Natural Capital Declaration signed by 39 global financial institutions committing to value and account for nature’s role in the global economy and in financial decisions.

2. Sustainability Becomes a Matter of Risk and Resiliency: Weather had a major impact on companies in 2012 with 11 extreme weather events reaching $1 billion or more in losses and superstorm Sandy costing more than $100 billion. The insurance industry has long viewed climate as their top risk factor.  Businesses are focusing more on risk mitigation and the potential impacts of resource shortages and climate.  Resiliency has become a priority as more companies consider sustainability issues in their scenario planning.  

3. Corporate Reporting Gets Integrated: According to CorporateRegister.com over 5,000 sustainability reports are published each year. Companies are starting to merge sustainability and traditional financial reporting in ways that speak to the investor.  PUMA published a 2012 Environmental Profit & Loss statement valuing its environmental impact throughout the company’s supply chain.  They believe this will help them identify focus areas for more sustainable practices, manage risk, and make more informed business decisions.   

4. The Sharing Economy Makes its Mark:  The new “sharing economy” providing access to goods and services in lieu of ownerships, has become a disruptive force for business models. Yerdle allows you to loan or borrow things from your Facebook“friends.”  Edmunds.com reports that millennials (aged 18-34) bought 30 % fewer new cars in 2011 than in 2007 due to the high cost of car ownership and access to services like Zipcar and RelayRides. Large companies like Walmart and Home Depot are responding by moving into the sharing or renting space.  

5. Commerce Gets Relocalized: As a backlash to globalization, relocalization seeks to center societies around local production, strengthen local economies, improve the environment and build social equity. BALLE, a non-profit promoting “localism” helps strengthen communities by connecting regional resources and the networks of consumers, investors and entrepreneurs. In one growing trend,  large companies are finding savings in the “total cost of ownership” by “reshoring,” bringing manufacturing closer to where goods are sold.  

6. M2M Enables the Rise of Greener Machines: Machine to machine communication has been growing behind the scenes.  State of Green Business notes that there could be, “[...] 50 billion connected devices by 2020.”  This effects sustainability because new innovations in M2M processes increase efficiency and productivity.  It could also make energy usage and supply conditions more intuitive as M2M technology can monitor trends and predict demand or when to power down.  M2M will be a huge factor for sustainability because it can enable more profitability, productivity and corporate responsibility.

7. Sustainability Goes App Crazy: An influx in available data (anything can be monitored and tracked these days!) has led to the creation of various applications to track and use data.  Applications such as greenMeter, JouleBag, AirStat.us, and Green Button are allowing companies, employees and individuals to utilize these easy-to-access services to track and enhance sustainability efforts.

8. Materiality Becomes Material for Investors: Investors are now looking at a company from a sustainability perspective as a decision-factor for their investment.  It’s also beginning to impact a company’s stock valuation or price.  Though, State of Green business points out, “While SEC rulings are mandating reporting of material environmental, social and governance (ESG) issues in agency filings, their disclosure is typically sparse, inconsistent, and can omit large issues facing a company.”  Eventually, more information regarding sustainability will be required from companies.  Some companies are already appending their annual sustainability reports, but it could become the norm.  

9. Companies Look Past Their Goals: So many companies are beginning to set sustainability goals as more and more hit the beginning of the curve on a path to sustainable business.  What happens when companies meet those goals though?  Many companies such as UPS are already publicizing their over-accomplishments.  Are companies aiming too low or making adequate progress.  Either way, companies are beginning to tackle the issue of not only setting goals, but making sure they’re audacious and reachable, then setting a path to a loftier goal once met.  

10. Peak Sustainability Threatens Corporate Progress: Companies are beginning to see that as sustainability becomes tightly woven into the fabric of their business, they’re seeing less of a need to hire specialized senior sustainability officers.  This could be a sign that a company is truly integrating sustainability into every facet of their business, thus successfully creating a culture of sustainability.  However, is it necessary to still have someone at the helm leading sustainability efforts?  State of Green Business feels that there will be a rebound in the hiring of executive sustainability officers as this has proven to be the most efficient and effective way to meeting sustainability goals.  

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GreenBiz.com recently launched their sixth annual State of Green Business 2013 report. Partnering with leading research firm, Trucost, this year’s report has enhanced data and a greater global scope. Trucost works to place a value on the natural capital and a price on pollution and use of resources. Many of the companies analyzed report cost savings and greater innovation through better supply-chain resource management. Environmental research and development by S&P 500 companies has more than doubled in the past five years, despite the down economy. The top 10 trends highlighted in this year’s report are:

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