For all those still skeptical whether the sustainability (aka "green") movement will ever produce new revenue streams, the evidence is in that at least one industry sector is doing exceptionally well by these initiatives; namely, those who audit or prepare corporate sustainability reports. According to Corporate Register, the number of companies producing sustainability reports (known variously as corporate social responsibility reports, or CSR) has more than doubled over the past three years, from 2,000 in 2007 to 5,000 in 2010.
For instance, in Lockheed Martin's 2010 Corporate Energy, Environment, Safety and Health Report, the aerospace manufacturer goes into detail about its 150 carbon-reduction projects. The company's "Go Green" program addresses key areas of the supply chain where sustainability efforts will pay off. For example, Lockheed Martin collaborated with one of its suppliers, computer giant Dell, on eliminating extra packaging by shipping in multipacks or recycled containers. Lockheed Martin estimates that it decreased waste to landfill by over 1 million pounds between 2009 and 2010 by insisting that its suppliers reduce excess packaging. "We are embedding sustainability practices into our DNA," says David Constable, Lockheed Martin's vice president of energy, environment, safety and health.
According to Ernst & Young, the percentage of CSR shareholder resolutions that won at least 30% shareholder support (which is considered a significant threshold by many corporate board members) has increased from 3% in 2005 to 27% in 2010. And based on a study by PricewaterhouseCoopers, it's those activist shareholders who are insisting that companies do a better job of disclosing what progress they are making toward improving their sustainability profiles.
Photo: Lockheed Martin
"Companies have a significant opportunity to improve their sustainability reporting, and investors are increasingly expecting the precision and the context that they've come to expect with financial reporting."
The most influential stakeholders of a sustainability strategy, according to a study conducted by KPMG, are a company's customers (47%), their employees (34%), the management team and their board of directors (34%), regulators (29%), competitors (20%), business or supply chain partners (17%) and investors (16%). More than half (55%) of U.S. companies have a formal sustainability strategy in place, according to KPMG, with the key business driver behind those efforts being enhancing brand reputation (37% of respondents).