In today’s business world, being green is a necessity. Shareholders, investors, consumers and company employees all want to know how your organization is approaching sustainability.

Whether companies are successful at their corporate sustainability initiatives are another story. The Huffington Post’s Mark Tercek evaluated successful corporations and found that they have similar plans for success.

1. The Chief Sustainability Officer: These inspired leaders are paving the way as key players for the development of solutions that benefit nature and business.
   These CSOs need to have a strong understanding of a company’s core operations, possess a commitment to the environment and foster strong relationships with allies. Tercek writes “a great CSO builds a true culture of sustainability across every aspect of the business, embedding environmental thinking into employees’ goals, measures and incentives.”
2. The Eco-Advantage Mindset: When a CSO works alongside a stellar CEO who shares the commitment to making sustainability a top priority, good things happen. As a team, they take a long-range view of time frames and payoffs when they evaluate their decisions. Together, their actions remain transparent to stakeholders and the general public.
3. Full Integration:  Strong sustainability leaders have the ability to integrate nature into core business strategies because they recognize the value of nature. Investing in long-term resources will ensure a solid position in the future.
4. Resolution: In an ever-evolving field, there is going to be criticism. Strong sustainability leaders realize that perfect outcomes are not in the cards. Just because there are setbacks, doesn’t mean that these sustainability chiefs are going to step back from these long-term plans.

ChiefExecutive.net also brings to light that CSOs handle more than just being green. They also oversee sweatshops, workforce diversity, pay equity and community service. They serve as a resource to help overturn bad publicity.

A new survey by Ernst & Young and GreenBiz Group has found that sustainability activities are being driven by financial considerations and other business objectives. Many companies are starting to realize that being green and being economic can go hand-in-hand.  The report, Six Growing Trends in Sustainability, addresses this concept and more.

Trend 1: Sustainability is growing, but the tools are still developing: Since CorporateRegister.com began tracking corporate responsibility reports in 1992, the number has grown from 26 to 5,593 in 2010. As the demands for accountability have increased, customers, employers, investors, shareholders, policymakers, activists, analysts and suppliers each have taken an interest in a company’s sustainability matters.

The study found that 66% of the respondents of the survey reported an increase of inquiries over the past 12 months from shareholders and investors about sustainability-related issues. To meet this demand, companies are creating sustainability reports. The majority of these reports are basic spreadsheets that include life-cycle information.

Trend 2: The CFO’s Role in Sustainability is on the Rise: The report focused on three key areas in which the CFOs are playing an increased role: investor relations, external reporting and assurance, as well as operational controllership and financial risk management.

The survey found that 65% of respondents have CFOs who have taken on an increased role in sustainability. Cost reductions and managing risks are the two key drivers of their company’s sustainability agenda.

CFOs are also more involved because of the growing scrutiny of company sustainability issues by equity analysts. Eighty percent of companies identified new revenue opportunities as a means to drive sustainability initiatives. Sixty-six percent of those surveyed have seen an increase in requests for information regarding sustainability-related issues from their investors and shareholders.

80 percent said new revenue opportunities will be driving sustainability initiatives. And 66 percent have seen an increase in inquiries about sustainability-related issues in the past 12 months from investors and shareholders. We discussed this trend in an earlier blog post.

Trend 3: Employees emerge as a key stakeholder group for sustainability programs and reporting: An interesting finding of this survey is that employees ranked ahead of shareholders and investors as the second greatest stakeholder in driving a company’s sustainability initiatives. As companies continue to engage employees on sustainability, they achieve increased attraction and retention, improved operational efficiencies; strengthened customer relations, increased innovation and strengthened community ties. 

It has also been found that companies that distribute their sustainability reports among their employees see this information shared with other external parties by their employee. Employees have a strong voice in the sustainability initiatives of their company employer.

Trend 4: Despite regulatory uncertainty, greenhouse gas reporting remains strong, with growing interest in water: Three-fourths of those surveyed have set greenhouse gas reduction goals, with 60% reporting them publicly. Companies look to release these numbers because of their reputation, their customer expectations and their efficiency goals.

The mining, oil and gas, chemicals, agriculture, power and utilities and food and beverage industries have an increased interest in reporting on water. Sixty-two percent of respondents to the survey publicly report water usage and one in six have their water footprints verified by an independent third-party.

Trend 5: Awareness is on the rise regarding the scarcity of business resources:
Companies are already recognizing resource constraints. Seventy-six percent of respondents anticipate that their core business objectives will be affected by natural resource shortages in the next three to five years. This availability is becoming a reporting requirement for companies, as many respondents have been asked about the sustainable sourcing and procurement of raw materials. Other concerns include conflict minerals,  palm oil and rare earths.

Trend 6: Rankings and ratings matter to company executives: Respondents conveyed that filling out surveys and questionnaires regarding sustainability are important. Fifty-five percent of respondents believe these responses are a primary means of communicating with investors about their performance and initiatives in this area. These respondents believe that they can make a difference at their level and look upon the following ratings and ranking with high regard: The Dow Jones Sustainability Index, The Carbon Disclosure Project’s leadership rankings, Fortune magazine’s “Most Admired Companies” list, The 100 Best Corporate Citizen, named by Corporate Responsibility magazine and Newsweek magazine’s Green Rankings.

This joint survey was conducted in late 2011, with responses from 272 sustainability executives in 24 sectors who were employed by companies with annual revenues that exceeded $1 billion. According to Forbes, about 85 percent are based in the United States.

As companies are more increasingly monitoring the bottom-line results of social and environmental initiatives, the question is how does a company integrate these values to drive results.

Enter the Chief Sustainability Officer (CSO). This position is still a fairly new leadership role and many CSOs are given little to no guidance on how to complete the tasks at hand.

In her recent study, CSO Back Story:  How Chief Sustainability Officers Reached the C-Suite,”Ellen Weinreb observed that many CSOs have influence, but not the direct power that comes with leading a team through integrations. This raises the question of what the CSO is doing to achieve the results.

Senior Vice President and Partner of VOX Global, Tony Calando, provides some insight on how a CSO can drive increased sustainability within an organization. He writes for Triple Pundit that there are five hats a CSO must hold to be successful in implementing corporate and social responsibility within a company.

1. Catalyst: By knowing the corporate culture and framing the business case, the CSO can more easily integrate sustainability into a business.
2. Engineer: Change requires organizational structure. Without this structure, sustainability cannot be integrated across a company. When the CSO serves as an engineer for their organization, sustainability can be implemented at all levels.
3. Connector: A key aspect of the CSO is to bring the outside world into an organization and to utilize this knowledge to create plan that includes the social and environmental issues that intersect with a company’s needs.
4. Scout: Corporate social responsibility is always changing. The CSO needs to be someone who can scout out and interpret emerging trends. Not only will this enable the company to take advantage of new opportunities, but it will help avoid any risks.
5. Collaborator: The CSO will need to collaborate across multiple initiatives in different departments across a company. As more companies are starting to include social responsibility as something important to their organization, the implementation aspect may be slow, but will be successful with patience and communication.

While the role of the CSO may be ever-changing, the person who holds this position is setting up an organization to be able serve as a competitor in tomorrow’s business world.

As more and more investors are looking for data regarding sustainability, the line between financial data and non-financial data is becoming blurred.

Bloomberg’s Eric Roston writes “so here’s the paradox. If non-financial data, such as greenhouse gas emissions per dollar of revenue, is included in a financial reports for investors, how can it still be called non-financial?” Investors and companies are starting to define this reporting.

This reporting, referred to as environmental, social and corporate governance reporting (ESG), is on the rise in many corporations. Hank Boerner, chairman of the Governance Accountability Institute (GRI), shared with Bloomberg that much of this reporting comes in the form of a corporate sustainability report. The GRI has been collecting information of sustainability reports for 2012. While these reports exist, the data offers only a snapshot to investors.

Last year, 242 reports were issues and 186 of them followed the guidelines of GRI. This was an increase of 44 percent over 2010. Companies who have decided to incorporate their data into one report include Clorox, Northern Grumman, SAS, Genentech and Polymer Group Inc.

A recent report from Deloitte, “Integrated Reporting Navigating your way to a truly Integrated Report” may help your organization determine which information is material to your business.

Does your company have an integrated report? What are you experiences?

Corporate sustainability, and the reporting that comes along with it, can be a goldmine of information for businesses. Many companies tend to overlook the information that is available in their own reports.

According to a new report by Deloitte and Touche, executives could be exposing their company to long-term risks if they do not closely evaluate or disclose the information that they have collected.

The report, “The Disclosure of Long-Term Business Value: What Matters” contends that “companies of all sizes should consider factors such as resource efficiency, business-model efficiency, the potential for innovation, brand strength and corporate culture as part of strategic decision making,” explains GreenBiz.com.

GreenBiz.com’s Heather Clancy utilizes the example of manufacturing. If the company opens a new plant they should look more at the long-term outlook, such as the outlook for water supplies.

Eric Hespenheide and Dinah Koehler, the authors of the study, note that CFOs have a unique advantage points in this situation. They have the ability to consider long-term results for a wide-range of stakeholders. CFOs can reach the customers, suppliers, consumers, employees, non-governmental organizations and communities that contribute to the overall success of an organization.

We’ve discussed how sustainability is important to the consumers. The Deloitte and Touche study realizes this as well. Two of their guidelines include the ripple effect of the supply chain and the ability to question whether your organization has a social impact.

By tracking information other than financials, including greenhouse gas emissions, waste-management policies, water consumption and corporate social responsibility, companies have the ability to take on a whole new dimension in the ever-changing business world.