One of the relatively unsung recent corporate trends is the growth of sustainable practices (i.e., the consideration in business operations of environmental, social and economic factors), despite a sluggish economy and lack of direct statutory mandates at least in the U.S. The percentage of companies that are "highly engaged in sustainability" has nearly tripled in the last six years to forty-two percent in 2012 (see 2012 Greening of Corporate America, which surveyed 200 corporate executives). In fact, fifty-eight percent of companies are selling green products (i.e., products that are energy-efficient, save resources, reduce the carbon footprint of buildings, or have other green characteristics) and sixty-five percent of the companies surveyed believe that adopting sustainability practices gives them a competitive advantage (more than double the number in 2006).
Similarly, the Global Reporting Initiative 2011/12 reports that the number of companies preparing sustainability reports has increased between seventeen percent and twenty percent every year from 2007 to 2011 with ninety five percent of the two hundred and fifty biggest companies in the world now reporting their sustainability performance.
Additionally, green buildings are become the new normal in the non-residential building market. For example, forty-seven percent of companies surveyed in 2012 Greening of Corporate America stated that sixty percent or more of their new projects will be sustainably built. Similarly, the McGraw-Hill Construction Green Outlook 2013 expects that fifty-five percent of the non-residential construction in the United States is expected to be green by 2016 (an estimated $75 billion market). Despite the recent controversies associated with the adoption of LEED green building criteria (see, e.g., http://sustainability-counsel.com/2012/05/24/how-will-gsa-respond-to-congressional-opposition-to-leed-2012/), McGraw-Hill's construction database (cited in the McGraw-Hill Construction Green Outlook Report) (which tracks bids and sub-bids by contractors) found the term "LEED" appears in sixty percent, by value, of project specifications.
The motivation is not entirely altruistic. Ninety percent of companies surveyed in the 2012 Greening of Corporate America report anticipate reduced costs due to sustainability practices, primarily from energy savings. Climate-change issues are also among these considerations. Trusted consultants are advising businesses that they will face more unpredictable and extreme weather, and disruptions to market and supply chains, thus "corporate risk management must evolve to help their organizations track these issues and respond." Pricewaterhouse Coopers LLC (PwC), Risk Ready: New Approaches to Environmental and Social change (November 2012). Specifically, any "investment in long-term assets or infrastructure, particularly in coastal or low-lying regions, needs to address" more pessimistic climate change scenarios and "scrutinise the resilience and viability of ... supply chains." PwC, Too Late for Two Degrees? Low Carbon Economy Index 2012 (November 2012). In fact, PwC found that eighty-three percent of S&P 500 companies state that they are integrating climate change issues into their risk management processes.
In summary, despite the uncertainties in defining and funding sustainability initiatives, this concept is becoming an important element of corporate strategy.
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