Trucost News / 31 Jan 2017

Sustainability is increasingly core to business strategy, says new report

The report assesses the sustainability performance of U.S. companies in the S&P 500 index as well as those in the S&P Global 1200

10th annual “State of Green Business” finds optimistic signs amid growing uncertainty

Companies and investors increasingly understand the fundamental importance of sustainable business and are taking action to reduce their environmental impacts, according to a new report.

“State of Green Business 2017,” published by GreenBiz Group in partnership with Trucost, is the 10th annual assessment of the progress by companies around the world in addressing their energy, waste, water, greenhouse gas and other impacts, and in increasing their sustainability investments, transparency and other leadership activities.

The report assesses the sustainability performance of U.S. companies in the S&P 500 index as well as those in the S&P Global 1200.

“In an increasingly complex business environment of growing resource use and climate concern, along with the uncertainties brought about by the 2016 U.S. elections, sustainable business faces a challenging future,” said GreenBiz Group Chairman and Executive Editor Joel Makower, the report’s lead author. “However, we’re seeing that the world’s largest companies remain steadfast in their sustainability commitments and achievements.”

Among the signs of progress:

  • The price tag associated with natural capital impacts caused by companies — from resource extraction and emissions into the air, water and soil — was down over 15 percent since its peak in 2013, continuing a trend observed in the 2016 report.
  • Total assets invested in the United States that consider environmental issues have grown 77-fold since 2010 and now exceed $7.79 trillion. It was also a record year for green bond issuance, up 92% on 2015 figures to $81bn. The total value of corporate green bonds offered to raise funds to support projects that have positive environmental benefits grew 79-fold since 2012, valued at $38.4 billion in 2016.
  • Nearly 60 percent of global stock exchanges have implemented, or are in the process of developing, environmental requirements for companies wanting to list with them impacting more than 50,000 companies listed on those exchanges.

On the negative side, the use of wind, solar and hydro has stagnated and even regressed slightly since 2011. This is despite findings by the World Economic Forum that solar and wind power is now either the same price or cheaper than new fossil fuel capacity in more than 30 countries. Meanwhile, companies’ current greenhouse gas reduction targets account for less than 7.5 percent of what is needed to be achieved every year between now and 2050 in order to meet the climate goals set forth in the Paris Agreement.

“The fundamental fact is that we are still consuming natural capital — the limited stock of natural resources on which business and society depend for prosperity and well-being — at an alarming and unsustainable rate,” said Richard Mattison, CEO of Trucost, a division of S&P Dow Jones Indices. “Nearly half of the world’s 1,200 largest companies would be unprofitable if they had to pay their fair share of the $3.4 trillion in environmental and social costs of their resource consumption and pollution in 2015.”

The report also names 10 sustainable business trends for 2017, including the growing role of blockchain in company sustainability efforts, the growth of advanced materials that support companies’ circular economy ambitions, the notion that water can become an unlimited resource in a circular economy, and companies’ increased investments in improving their supply-chain partners’ environmental and social performance.

Further Information

The State of Green Business 2017 is free to download.

Media contact

Trucost: James Richens, +44 (0)20 7176 9804, james.richens@trucost.com

18 June, 2020
Events Building Best in Class ESG Practices’ – Webinar

In this Webinar we will take a look at how global banks and asset managers can build best practices around data quality, assessment frameworks and risk modelling. Christopher Perceval – Director and Head of Business Development EMEA at Trucost, part of S&P Global will be speaking at this event. For more info or details...

Find out more
16 June, 2020
Events ESG Disclosure and Due Diligence:  Through the Lens of Equity Capital Markets – Webinar

AFME’s first sustainable finance webinar will explore the increasingly important topics of ESG Disclosure and Due Diligence and more specifically, what they mean for Equity Capital Markets. With the support of our co-hosts, Allen and Overy, we’ll be using their planned report as a foundation to discuss further implications, challenges and projections around these...

Find out more
28 January, 2020
Events Uncovering Business Value from Environmental, Social and Governance Factors, Webinar, 28th January 2020

More than ever companies are measuring and disclosing their performance around environmental, social and governance (ESG) issues. By doing this, companies are able to reduce financial risks and uncover business opportunities. Moreover, record amounts of capital are flowing towards companies who do good. In this webinar you will learn: • The current sustainability landscape...

Find out more

VIEW ALL NEWS & INSIGHTS