Recent Carbon Disclosure Project Report Reveals Heightened Corporate Sustainability Action

By David A. Kelly and Heather Ashton, Upside Research

The path for an enterprise toward sustainability is a long one, driven by a number of influencers, including regulatory groups, shareholders, and customers. In fact, many industry experts on sustainability believe that regulatory groups and government mandates will be needed to achieve the higher goals for sustainability as set forth by some industry groups. The logic follows that most corporations will not be willing to spend the time and money required to initiate and implement sustainability programs until it becomes a necessity. However, the recent annual report from the Carbon Disclosure Project (CDP) reveals a surprising trend in corporate sustainability.

For the first time since it began reporting on sustainability practices in the S&P 500 in 2003, the latest survey results reveal that a majority of the S&P 500 participating companies integrate sustainability efforts into core business strategy. This is without any major mandates driving participation. Considering that, according to the CDP, over 3,000 organizations in some 60 countries worldwide measure and disclose to the CDP their greenhouse gas emissions, climate change strategies, and water management, it is apparent that sustainability is taking a top place on the corporate hot-button list.

So, what is the driver for this attention toward sustainability? As with anything, if you follow the money, you will find the root cause. The CDP is an organization that acts on behalf of more than 500 institutional investors that hold US$71 trillion in assets under management, and 50 purchasing organizations (think Walmart, PepsiCo, and Dell), all of which have a very large vested interest in how companies are performing in a competitive, global market. Clearly, the message is clear that sustainability and “greening up” are important shareholder values because they are concerned with how rising energy costs and consumption may impact future corporate earnings. Corporations have responded to the heightened interest with green initiatives.

Tracking and measuring emissions and carbon footprints are one component, and a necessary one to get any sustainability initiative off the ground. But, linking those measurements to reduction targets and performance improvements is where sustainability gets strategic. From this recent survey results, it appears companies have focused on some of the low-hanging fruit for sustainability practices. The most common projects were energy efficiency improvements in facilities and supply chains. But, this attention to hotspots like energy consumption and emissions reduction is paying off. More than 60% of projects undertaken are offering payback in three years or less.

From these survey findings, it appears that there is a prime space in the IT toolkit for sustainability software solutions, especially those that not only track and measure key metrics, but also those that can like the metrics to strategic goals for reduction and improvement. Sustainability is clearly here to stay, and it will eventually be a core part of every enterprise IT environment, much like ERP has become.