The State of Green Business, 2013

The 2013 State of Green Business report, our sixth annual, has just been published. It tells a story of the shifting business reality — a world slowly coming to grips with a changing climate, economic volatility and great risks to business as usual.

Simply put, it recognizes that business as usual isn’t sustainable during unusual times.

Ours is a world in which a flood in Thailand can cut off global supplies of computer disk drives for the better part of a year; where a record-low Mississippi River can choke the flow of commerce; where an unprecedented hurricane (or “superstorm”) can upend one of the world’s financial centers for weeks. In that context, how should a company view climate change, renewable energy and resource efficiency? How should its shareholders view risk and resilience as it relates to the surety of their investments? And how should communities assess the responsibility of companies within their regions, in terms of the fair appropriation of local resources when they become scarce?

With increasing volatility, where everything from natural resources to supply chains to political realities to the global economy can be turned topsy-turvy in relatively short order, “sustainability” takes on new, poignant meaning. It has to do with aligning economic, environmental and social interests, of course. But increasingly, it is taking on even more strategic importance, linked to reducing supply-chain risk and ensuring business continuity during disruptions, the right to operate in resource-stressed areas, reliable and cost-efficient energy supplies, and brand value and reputation.

In other words, the things upon which companies sink or swim.

In this year’s report (free  download here), we’ve made some significant changes — not just in the look and feel of the document, but in its content.

First and foremost, we’ve partnered with Trucost, a leading research firm focusing on natural capital and sustainability metrics, to revamp the indicators by which we assess progress by the private sector in addressing global environmental challenges. In the spirit of continuous improvement, we scrapped the set of metrics we’d used for the previous five reports in favor of a more comprehensive and robust set that is global in scope. They cover companies’ natural capital costs, their supply-chain impacts, various measurements of transparency and disclosure, and other things.

These are the new metrics of sustainable business. They go well beyond the nice-to-do issues of “corporate responsibility” and “eco-efficiency.” They view incrementalism as insufficient, ignorance as unacceptable, and unpredictability as the new norm.

Next page: Accounting for natural capital