Despite the additional costs involved in becoming environmentally compliant, companies who are committed to sustainability are proving to outperform non-green companies.
The Carbon Clean 200 list claim that the world’s greenest large companies are outperforming their more polluting counterparts. Included in the Carbon Clean 200 list are companies Tesla, Vestas, Toyota, DONG Energy and Panasonic which all qualifies for having a market capitalization of at least $1 billion and generated 10% of their revenues from clean sources.
“The Clean 200 nearly tripled the performance of its fossil fuel reserve-heavy counterpart over the past 10 years, showing that clean energy companies are providing concrete and measurable rewards to investors,” said Toby Heaps, CEO of Corporate Knights.
“What’s more, the outstanding performance of this list shows that investors must sacrifice returns when investing in clean energy is outdated. Many clean energy investments are profitable now, and we anticipate that over the long term their appeal will only go up as technologies improve and more investors move away from under performing fossil fuel companies.”
And while many companies remain skeptical about a business’s capacity to profit while focusing on sustainability, Unilever recognizes just how possible it is within their organization particularly in their most sustainable brands – Lipton, Knorr, Dove, Dirt is Good and Hellman’s.
The numbers speak for themselves. In 2015, Unilever lessened its manufacturing CO2 emissions from energy 39% per metric ton of production compared to the levels recorded in 2008. The company also reduced its water use by 27% per metric ton of production. And in manufacturing, Unilever reduced its waste by 97% per metric ton of production, compared to 2008. This effort has contributed $227 million in cost-benefits to the company over just 7 years .
The CDP Climate A List which currently involves 193 companies are also trailblazers for doing the most they can to combat climate change. Amongst these companies are Apple, General Motors, Coca-Cola, Walmart, HP, LG, and BMW and outperform the Bloomberg World Index.
Paul Simpson, CEO of CDP, says: “We answer the number one question US investors ask CDP about climate change data, which is whether there is evidence of a link to financial performance. The answer is a resounding yes. There is only upside for corporations acting in a prudent way to address the challenges of climate. At the very least, this will put to rest the common misconception that taking action on climate change exacts a cost to profitability.”
However, CDP wants to make it clear that they believe that greener practices are not directly responsible for an increase in profitability but rather, companies who choose sustainability as their core leadership strategy are the most high-performing companies.
And companies who perform the best, ultimately profit the most.