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Green product sales up average 91% for GE, Dow, others

A new analysis of a dozen S&P 500 companies reveals how companies are growing revenue streams for green products.

The global marketplace is rapidly moving in a direction where companies that have the capability to create sustainable products and services will seize competitive advantage and gain market share.

Far-sighted companies are busy building unique business models that promote sustainability, provide distinct product differentiation and satiate the growing buyer appetite for responsible consumption.

Now, new research by The Conference Board has revealed a very encouraging trend in favor of sustainable products and services. Sales revenues at many large companies are increasingly coming from a portfolio of innovative products and services designed to enhance sustainability.

From 2010 to 2013, aggregate revenues from sustainable products and services climbed by 91 percent, while overall sales grew just 15 percent, among a sample of 12 S&P Global 100 companies.

Manifestations of the trend have been spectacular at some companies in particular.

Finding financial success

For example, at Kimberly-Clark, from 2010 to 2013, the revenue from sustainable products shot up by a dramatic 296 percent, while overall company revenue increased by less than 8 percent. The revenue share of sustainable products jumped from 10 percent to 37 percent during this four-year period.

The growth story has been quite similar at Dow Chemical. The company’s revenue from sustainable products swelled 147 percent over the same four-year period. Overall revenue during this period inched up by only 6 percent.

The same positive trend also was visible at six other companies in the group of 12 studied.

These included world-leading brands such as General Electric, Philips, Siemens, Panasonic and Toshiba. The revenue share from sustainable products at Panasonic more than doubled from 10 percent in 2013 to 22 percent in 2014.

Thomas Singer, author of the report and The Conference Board’s principal researcher for corporate leadership, said that more than a matter of responsibility or reputation, sustainability has become a potentially lucrative business strategy for a broad range of companies.

One motivation behind developing sustainable products and services is the opportunity to improve profitability.

The report cited a 2014 study by Nielsen in which 55 percent of online consumers indicated they were willing to pay more for products and services provided by companies that were committed to positive social and environmental impact.

The report, prepared in collaboration with the Investor Responsibility Research Center Institute, lists dozens of sustainability R&D initiatives in the automobile, chemical, industrial and technology sectors.

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