The rollback of America’s environmental regulations and international commitments has galvanized companies around the world to extend or redouble their efforts, according to a new report.
“State of Green Business 2018,” published by GreenBiz Group in association with Trucost, part of S&P Dow Jones Indices, is the 11th annual assessment of the progress by companies around the world in addressing their energy, waste, water, greenhouse gas and other impacts, and in increasing their sustainability investments, transparency and other leadership activities.
The report assesses the sustainability performance of the leading U.S. companies in the S&P 500 index as well as a global pool of the largest and most liquid companies in the S&P Global 1200.
“The double-barrel impact of the Paris climate agreement and the United Nations Sustainable Development Goals, both enacted in 2015, is finally being felt as companies begin to align their sustainability goals and, ultimately, their operations with these global commitments,” said GreenBiz Group Chairman and Executive Editor Joel Makower, the report’s lead author. “And even though the United States government remains on the sidelines of both efforts, the private sector — allied with states, cities and other nations — is marching forward. If not in lockstep, at least in the same general direction.”
Among the findings included in the report:
Corporate greenhouse gas emissions continue to decrease, reaching the lowest level in the past five years. The 1,200 largest companies in the world emitted 12 percent less greenhouse gas (GHG) emissions in 2016 than they did in 2012, while the 500 leading U.S. companies emitted 4 percent less. This is mainly a result of lower GHG intensity in fuels used in companies’ direct operations.
The amount of waste generated decreased by 22 percent compared to 2012 for the 1,200 largest companies in the world. However, waste generation increased by 13 percent for the leading companies in the U.S.
The share of global and U.S. companies having GHG and water-reduction targets grew by roughly 10 percent over the last five years. In 2016, about 60 percent of global companies set a GHG reduction target, while 25 percent of global companies set a water reduction target.
Current carbon targets contribute just 20% of the reductions needed by the top 1,200 global companies to align with the Paris Agreement 2°C goal
“Many of these impacts are embedded in the supply chains of companies rather than their direct operations,” said Richard Mattison, CEO of Trucost, part of S&P Dow Jones Indices. “This poses serious risks for companies as carbon pricing regulation strengthens and climate-related impacts such as droughts disrupt supplies of water-intensive commodities. So, it is positive that more companies are disclosing supply-chain carbon emissions and water use.”
The report also names 10 sustainable business trends for 2018, including the rise of environmental, social and governance data among large, mainstream investors; the growth among companies of science-based targets; the recent rise of financial products and services aimed at supporting renewable energy and other green initiatives; and the increased role of artificial intelligence and synthetic biology to take on seemingly intractable sustainability challenges.
The free report can be downloaded at www.greenbiz.com.