Source: Forbes
Url: http://www.forbes.com/2010/06/16/sustainability-corporate-strategy-leadership-citizenship-ethisphere.html?partner=yahootix
Dean Krehmeyer, Michael Lenox and Brian Moriarty, 06.16.10, 04:18 PM EDT
It's too late to have it any other way.
Corporate America has been dramatically increasing its attention to and leadership in sustainability. Companies have been announcing plans for carbon-footprint reduction, publishing sustainability reports, creating billion-dollar clean energy investment funds and forming sustainability coalitions with corporate customers, suppliers and even competitors.That's happened because investors and the public have been insisting that sustainability move beyond being a departmental concern and into the boardroom and executive offices. Yet a 2008 McKinsey survey found that while 60% of executives believed climate change is strategically important, fewer than a third were actually doing anything about it.
Why the disconnect? Partly because it's all so new and complex. Executives need to begin by understanding exactly why they're engaging in sustainability activities.
There are three basic drivers of corporate sustainability initiatives: regulatory requirements, market incentives to go beyond those regulatory requirements and new market opportunities.
Some initiatives aren't a matter of choice at all, of course. For example, the U.S. Environmental Protection Agency recently proposed revised requirements for companies needing permits for the emission of greenhouse gases in new plants, factories and refineries. Moreover, a failure to respond to public pressure from activists can harm a company's brands, profits and overall reputation.
Companies that choose to exceed minimum mandates can win a voice in shaping future regulation. Apple ( AAPL - news - people ), for instance, used its 2009 sustainability report to identify several toxic substances common to electronic products as the greatest environmental challenges facing the industry. The company said its own products were free of such material, adding, "In keeping with our philosophy over the last decade, Apple is not waiting for legislation to ban these substances." Apple is leading by example and even shaping the public and regulatory dialogue.
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