Trucost Blog / 18 Jan 2010

The state of Green Business 2012

Joel Makower, chairman and executive editor of GreenBiz Group comments on the fifth State of Green Business report.Trucost supported the report by contributing data on corporate environmental performance and disclosure.

Our 2012 State of Green Business report, our fifth annual, has just been published. I’m not going to mince words: Things aren’t going as well as we’d hoped. For the first time since we began doing our assessment, in 2008, several of the indicators have taken a downward turn.

Each year, we take the pulse of sustainable business through the lens of 20 indicators of progress, or lack thereof. The indicators measure such things 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, we provide the metric, an analysis, and our take on whether we’re making progress (“swimming”), holding our own (“treading”), or going backwards (“sinking”).

For the first time, we saw a significant decline in progress-not just in one indicator, but several. Cleantech investments, energy efficiency, green office space, packaging intensity, toxic emissions, and toxics in manufacturing — all of these trend lines leveled off or reversed course in 2011. Only one indicator — green power use — markedly improved.

What’s to blame? Simply put, sustainable business is suffering a recessionary hangover.

For much of the past few years, many of our indicators moved in positive directions. Combined with the commitments we were seeing, as well as our surveys of sustainability leaders in large corporations — which told us that their budgets, staff, and goals were holding steady or growing during the recession — we concluded that the economic turmoil, at least in the United States, wasn’t putting a damper on companies’ efforts to improve their environmental performance. The results could be seen each year in the continued progress measured by the GreenBiz Index.

We were, shall we say, irrationally exuberant.

The reality is this: Much of the progress we saw in our 2010 and 2011 reports were lagging indicators based on work done with pre-recessionary budgets. As the economic realities have set in, environmental progress has stagnated, or worse.

That’s not the full story. Despite our efforts to normalize many of the indicators to Gross Domestic Product in order to avoid spikes and drops resulting from economic booms and busts, we believe that less economic activity doesn’t always lead to lower environmental impacts. In some instances — electricity power plants, for example — industrial operations must operate at baseline levels that don’t always move in lockstep with the economy.

It’s not all bad news. This year, like all years, we find many promising developments in the world of corporate sustainability, as more companies make more commitments related to their products or operations. As we have in the past four reports, we pick 10 promising trends, from the rise of sustainable consumption, to the growing engagement of chief financial officers in companies’ sustainability initiatives, to the fact that clean technology, contrary to the political narrative, is alive and well, even flourishing. There is much reason for hope.

Indeed, that’s where the cognitive dissonance sets in: We report on so many promising developments each week, so many companies that are engaging more thoughtfully and holistically than ever with what it means to integrate sustainability into their operations, products, and services. We watch as clean technologies become competitive, as markets for organic foods and efficient vehicles reach into the mainstream, as companies achieve zero-waste factories and replace toxic ingredients with safer ones.

But for all of the good work being done, it’s simply not good enough.

Can we simply pass this off as a byproduct of a bad economy, and cross our fingers that progress will accelerate when times get better? Or is it time for companies to dig deeper, and for their employees and customers to get more engaged? What will it take to make real progress?

There’s a lot at stake here. We continue to be optimistic, though perhaps more cautiously than in the past.

Download report: The State of Green Business 2012

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