Green Practices Are Good for Business, New Research Shows
Fighting climate change isn’t just good for the planet or PR – it can also make companies more profitable. A new global index put together by international nonprofit CDP shows that companies who did the most to reduce their carbon emissions also performed better financially – 9.6 percent better on average. As a recent Forbes article pointed out, these successful companies were more likely to focus on strategies that saved money while also cutting emissions. They also tended to think long-term instead of short-term, make larger investments in clean energy than their peers, and see business opportunities within their climate strategies. The fact that these companies were both climate leaders and performance leaders contradicts the conventional belief that fighting climate change would hurt the economy. In fact, quite the opposite seems to be true.
Mike Scott, Contributor to Forbes
From A for Apple to Z for Zurich Insurance, companies that are doing most to tackle climate change are also financially outperforming their peers, new research suggests.
A new global index based on “companies that exhibit leadership through action to mitigate climate change” outperforms the Bloomberg World Index by 9.6% in the four year period from 2010, according to CDP, an international not-for-profit focused on building sustainable economies, which created the index. The index includes some of the world’s biggest companies, including Microsoft, Toyota, Heineken and Siemens.
CDP assessed almost 2,000 listed companies that replied to its annual request for information about how companies are tackling climate change and created the index of 187 companies, based on those that achieved an A grade, the highest ranking. Every year, CDP asks the world’s biggest businesses for information on the issue on behalf of investors representing more than a third of the world’s invested capital.
Image credit: U.S. Geological Survey/photo by Jessica K. Robertson