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Does Sustainability Increase Profits or Not?

RP Siegel | Monday January 30th, 2012 | 0 Comments

A UN-backed survey conducted by Globescan and SustainAbility, of 642 senior executives, campaigners and academics found that the vast majority feel that pressure to deliver short-term financial results is impeding their sustainability efforts. Eight-eight percent of respondents called this pressure a “significant barrier.” These results will by fed into the UNEP report on the business case for the Green Economy that will be released later this year.

Those surveyed also named inappropriate regulations, low awareness of the financial benefits of green practices and low demand for green products and services as important factors.

In response to these results, UNEP executive director Achim Steiner, said. “This survey underlines that governments must play their part, national and internationally, in setting the standards and backing the smart policies needed to promote sustainability over extraction and degradation of the world’s natural resource base,”

Certainly having governments weigh in on the issue would be helpful. But do companies today really have to choose between profitability and sustainability or is this a false choice?

Another recent study suggests this is a false dichotomy. MIT Sloan Management Review and the Boston Consulting Group, surveyed 2,874 executives in 113 countries, as reported in Forbes, and found that two-thirds of companies see sustainability as a “competitive necessity,” as compared with 55 percent who said the same thing last year. Furthermore, 31 percent of companies reporting say that sustainability is boosting their profits. The report claims that sustainability in the business community is reaching a tipping point, “the point at which a substantial portion of companies are not only seeing the need for sustainable business practices, but are also deriving financial benefits from these acts.”

Of course the sluggish economy has been a challenge, but as Nick Main, of Deloitte’s Sustainability and Climate Change leader points out, “You have to stay sustainable in the short term as well as in the long term, because otherwise, in the long term, you’re not there. But I do think people are more aware of resource scarcity everywhere.”

To this point, Sustainability’s Mark Lee adds, “individuals and brands that want to make a difference have to think in terms of how to deliver sustainability in this generation, else there might be no future equity to apportion.”

Anyone who has been reading TriplePundit for any time at all, has seen countless examples of companies reducing cost and increasing profit by taken a more sustainable approach to their business. Recent posting on retailers, fast food companies, mattress recyclers, and manufacturers ranging from, Clif Bar, and Kaiser Permanente, to General Motors, and Dupont, as well as phone company Sprint, and Southwest Airlines.

All of these are examples of companies that are saving money and increasing profits by taking a pro-active approach to sustainability.

Many of these managers who are saying that short-term results are pre-empting their sustainability efforts, are simply not thinking out of the box.

Changes can be made at all levels of an organization, in every facet, that will improve sustainability awhile reducing cost. Rocky Mountain Institute claims in their new book, Reinventing Fire, that our economy can reduce carbon by 82% while saving $5 trillion.

That’s a lot of savings for everybody that decides to jump on the bandwagon.

 

[Image credit: BulaPhotography: Flickr Creative Commons]

RP Siegel, PE, is the President of Rain Mountain LLC. He is also the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water. Now available on Kindle.

Follow RP Siegel on Twitter.


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