[Editor's note: This is the final installment of WRI's five-part blog series, "Aligning Profit and Environmental Sustainability." Each post has explored solutions to help businesses overcome barriers to better integrate environmental sustainability into their operations.]
Over the past month, we've discussed some of the key barriers that prevent companies from integrating sustainability considerations into their long-term strategies.
Countless companies across the world struggle with these obstacles: capital budgeting processes that fail to account for sustainability initiatives' benefits; financial teams whose goals don't align with those of the sustainability teams; and uncertainty about how to implement metrics that properly account for external environmental costs.
A handful of companies, however, are starting to identify effective ways to break down these barriers. Johnson & Johnson now allocates $40 million a year to a special fund that directs capital to greenhouse gas reduction projects, helping to lighten its environmental footprint while proving these projects generate good returns.
AkzoNobel and Alcoa have elevated the role of the chief sustainability officer in capital budgeting decisions to ensure the company is spending money to achieve financial and environmental results. And Natura is accounting for the environmental impacts of its suppliers and including those costs in its supplier selection process.
Achieving financial benefits through environmental sustainability
Companies that are adopting these forward-looking practices are accruing benefits now. Alcoa has found that its sustainability track record gives it better access to large markets such as Brazil, where a positive environmental track record is becoming a more important component in selecting products. Alcoa, AkzoNobel, Siemens and Grief have learned that by focusing on new products that help customers reduce their emissions, they are growing revenue and capturing new market shares. Companies are setting aggressive sustainability goals -- Mars, for example, aims to eliminate all fossil fuel energy use and greenhouse gas emissions from its operations by 2040 -- and achieving business growth at the same time.
These examples show that profit can be aligned with environmental sustainability. But while these examples are encouraging, they represent the few rather than the many. We've got a long way to go to mainstream these best practices.
Next page: 4 lessons