Big Green Breakthrough

Here’s more proof that going green helps sustain your business.

During the current economic slowdown, companies that practice sustainability are outperforming their industry peers by substantial margins.

In  an analysis conducted by management consulting firm A.T. Kearney, in 16 of 18 industries examined, companies recognized as sustainability-focused outperformed their industry peers over both a three and six-month period, Over three months (September to November 2008), the performance differential across the 99 companies surveyed in this analysis worked out to 10 percent; over six months (May to November 2008), the differential  was 15 percent.

Sustainability companies were identified based on their inclusion in the Dow Jones Sustainability Index (DJSI) or the Goldman Sachs SUSTAIN focus list. The companies included such industries as travel and leisure, technology, healthcare, insurance, retail, and food and beverage.

According to the analysis, the more successful companies had four characteristics in common:

1. A focus on long-term strategy, not just short-term gains
2. Strong corporate governance
3. Sound risk-management practices
4. A history of investment in green innovations

Notes the report:

“Green innovations—such as reducing waste and emissions, using alternate energy sources, and producing natural products—have become something of a “me too” cause in recent years. Yet companies with a history in green innovations have reaped the most benefits.  And those that continue to make meaningful investments will continue to prosper, both in terms of business results achieved and public perception.”