Can CFO’s keep flagging sustainability initiatives afloat?
In their ‘2012 State of Green Business report’ that has just been published, Oakland CA based, Greenbiz Group conclude that sustainability initiatives are not moving ahead as expect and that for the first time since they began their assessment back in 2008, several of the indicators have taken a down turn.
Each year, Greenbiz track 20 indicators measuring things such as carbon emissions, e-waste recycling, green office space, vehicle fleet emissions, toxic emissions, energy efficiency, employee commuting, corporate reporting, and a dozen other things. For each, they provide the metric, an analysis, and their take on whether we’re making progress (“swimming”), holding our own (“treading”), or going backwards (“sinking”).
Now for the first time in 2012, they have picked up a significant decline in progress spread across a range of indicators. Investments in clean technology, energy efficiency, green office space, packaging intensity, toxic emissions, and toxics in manufacturing have all levelled off or gone backwards in 2011. Only one indicator — green power use — markedly improved.
So is sustainable business suffering from the effects of the recession like most other things?
Greenbiz concludes that as the economic realities have set in, environmental progress has stagnated, or worse – this is despite smoothing their data by normalizing many of the indicators to Gross Domestic Product to avoid spikes and drops resulting from economic booms and busts. However, it’s not all bad news; the survey detected a rise in sustainable consumption and a growing engagement of chief financial officers in companies’ sustainability initiatives.
So do we simply pass of such findings as the impact of a weak economy, and cross our fingers that progress will accelerate when times get better? Or is it time for CFOs to motivate their companies to dig deeper, and for their employees and customers to get more engaged? Many of the companies that have started to measure their environmental impact using sustainability solutions such as those from SAP know that in many instances going ‘green’ brings real costs savings through initiatives like cutting down on packaging and investing in proven technologies such as heat exchangers. So it is far from sunk cost.
If you want to know more, Greenbiz have a webinar on the survey findings on 7 February and then Ernst & Young, who carried out the fieldwork, are joining with Greenbiz for a webcast on 19 March. This is designed to help CEOs, CFOs and other C-suite executives gain a better understanding of these issues, how they affect the course of business and how to design a long-range strategy to move their organization forward.
There’s a lot at stake here and the engagement of CFO’s can only be welcomed.
Reblogged this on Jamar L. Freeze.
Richard,
I loved reading the report — and it’s maybe pertinent to note that very first section is entitled “Sustainability Counts for CFOs”, with quotes such as:
“Aspects of sustainability—transparency, disclosure, compensation, and risk.. garner the attention of shareholders and others near and dear to the boardroom…
…According to a study conducted by Ernst & Young and GreenBiz.com, one in six (13 percent) respondents said their CFO was “very involved” with sustainability, while 52 percent said the CFO was “somewhat” involved…
…Greenhouse gas emissions, toxic ingredients in products, and reliable access to water, energy, and raw materials are increasingly seen as material risk factors that warrant scrutiny by shareholders, customers, and regulators.
…Growing calls for transparency and disclosure of sustainability impacts are requiring more, and more reliable, information about increasingly deeper levels of company operations and supply chains.
…Shareholder resolutions focusing on social and environmental issues made up the largest portion of all shareholder proposals in 2010 and 2011. That further bonds sustainability with board-level interest.”
I certainly sounds like they believe there’s been an uptick in CFOs paying attention to sustainability metrics, and the need for better data in organizations…
Part of the stagnation by companies is that a purely unbalanced environmental driven initiative stops at the doorstep of the CFO and goes no further. Green teams need to drive out costs and create revenue streams, so that the CFO can see that sustainability is more about employee engagement and strategically shifting the business to more profitable models than just a do-good or compliance focused activity. As always, cultural change impacts are overlooked and these need to be addressed with a focus on sustainability as a lever for free enterprise to create long-term support by the CFO.