Sustainability-focused companies outperform industry rivals

04 May 2010

Sustainability-focused companies outperform industry rivals

Companies that embrace a commitment to sustainability as a genuine and fundamental part of their business strategy have stepped ahead during the economic downturn and are now outperforming their industry peers. A recent global study has proven that companies prospering today, reaping cost-savings and competitive advantage, are those who embarked on a comprehensive sustainability strategy ten years



In a report by A. T. Kearney, called "Green Winners: The Performance of Sustainability-Focused Companies During the Financial Crisis", 'green' companies have out-performed their peers by 15% over a six month period, in 16 out of 18 studied industries. Companies which took sustainability on board up to ten years ago, before the green media movement, were able to increase production volume while reducing emissions, water consumption and packaging volume. These measures are helping to yield higher revenues. 

Dr. Daniel Mahler, the author of the study, said, "We find common characteristics among the leading companies that show that sustainability goes far beyond the narrow definition of being environmentally friendly." The characteristics he refers to include a focus on long-term strategy, not just short-term gains, strong corporate governance and sound risk-management practices. 

Incorporating sustainability practices into everyday business operations should not be a media-motivated move nor just a cost-saving initiative. The study highlighted examples of major brands increasing contract signings and doubling revenues as a direct result of taking sustainability to the core of the way they do business. 

This report adds to the growing amount of evidence that a full commitment to sustainability, as part of any company’s business strategy, is not just a social talking point but will result in competitive advantage; more importantly still, failing to do so will more than likely result in being left behind the competition.

 

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