Feb 16 2009
Time to “Double Down” on Sustainability?
A couple of months ago, I attended a presentation by Lori Duvall, the Director of Eco Responsibility Programs for Sun Microsystems. At that time, it was abundantly clear that we were in a global economic contraction. Yet Lori expressed the opinion that this was a good time for companies to “double down on sustainability.” Why? Because Sun sees revenue and cost-saving opportunities in sustainability. Its energy-efficient line of servers and storage servers represent revenue bright spots among its product offerings. At the same time, Sun is saving money and reducing carbon emissions by consolidating its data centers and showcasing its own technology.
But is Sun alone in thinking about “doubling down?”
Are other companies pulling back on their sustainability efforts because of budget constraints? Apparently, not as much as you might think. According to Lori, sentiment in favor of doubling down on such efforts is quite common among members of the EPA Climate Leaders program.
Better stock market performance?
Now we see data from an A.T. Kearney report, “Green Winners,” that finds companies committed to sustainability outperforming their industry counterparts in stock market performance. Of course, this is just one study and has its limitations. It is based on an analysis of companies in the Dow Jones Sustainability Index and the Goldman Sachs SUSTAIN list of companies. Companies on these lists were selected in part based on good corporate governance and industry position, factors that undoubtedly have a positive impact on their stock market performance – whether or not the companies have a focus on social and environmental sustainability.
Other studies show mixed results, depending on the timeframe for returns. A recent analysis of the Dow Jones Sustainability Index World 80 shows that sustainably-focused companies achieved better stock market performance than global stocks in general over the most recent 5-year period. However, their performance in 2008 was just as bad as the overall market. This may mean that, over the long term, companies with a greater focus on sustainability with outperform their counterparts. I hope and believe that this will ultimately prove to be the case.