Profit or planet? Global index reveals economic benefits of sustainable business

Google, Microsoft and Sainsbury’s are among the 187 firms who are ‘leading the charge in the fight to mitigate climate change’ in the inaugural Climate Performance Leadership Index from the Carbon Disclosure Project (CDP).

READ THE INDEX HERE

Analysis from the past four years shows that these index-listed companies have outperformed the Bloomberg World Stock Index by 9.6% – dispelling outmoded arguments that sustainability is a profit-paring pursuit.

In the past reporting year alone, these companies have reduced their total emissions by 33 million tonnes – equivalent to turning London’s car owners into cyclists for two and a half years.

Opportunity cost

CDP chief executive Paul Simpson argued that not addressing climate change would ultimately have the biggest impact on businesses’ bottom-line.

“The unprecedented environmental challenges that we confront today are also economic problems. This irrefutable fact is filtering through to companies and investors,” said Simpson.

“The impact of climate events on economies around the world has increasingly been splashed across headlines in the last year, with the worst winter in 30 years suffered by the USA costing billions of dollars. Australia has experienced its hottest two years on record and the UK has had its wettest winter for hundreds of years costing the insurance industry over a billion pounds.”

“The companies on our index are responding to market demand for environmental accountability and at the same time are making progress towards the realisation of sustainable economies.”

Making sustainability pay 

The index, selected from more than 2000 respondents, includes sustainable mainstays such as Heineken, Unilever and BT but also some firms that are lesser known for their ethical credentials such as Apple, General Motors and Goldman Sachs.

Almost half of the performance leaders are headquartered in Europe, with a further third located in USA and Japan.

Commenting on the new index, Christoph Wilfert of sustainability consulting company PE International said that the advent of ‘big data’ has been a key factor in enabling businesses to decode the impact of their operations quickly and effectively.

“True leaders in the field are using their sustainability information to become stronger businesses and to make better decisions based on what they have learned. They understand that analysing, reporting and benchmarking the data they have gathered can help to boost revenues, strengthen brands, cut costs and manage risks,” said Wilfert.

Room for improvement

The index was not a purely positive piece; identifying the three largest companies that failed to supply their climate data as Amazon, Comcast and Berkshire Hathaway.

The utilities sector also came under scrutiny; having relatively few sustainability ‘leaders’ yet producing five times as many Scope 1 and Scope 2 emissions as the next most polluting industry.

Download the full Climate Performance Leadership Index for free here.

Brad Allen