Brands spy green benefits

08 March 2012

NEW YORK: A majority of brand owners believe that enhancing their green credentials will serve to increase revenues and engage both consumers and investors.

GreenBiz Group, the research group, and Ernst & Young, the business services firm, polled 272 executives in 24 industries regarding their activity in this area.

Overall, they found that 74% of the panel believed cost reduction would drive the sustainability agenda in the coming two years.

Stakeholder expectations was the second most-cited factor, on 68%. Risk management – covering areas like scarce resources, environmental damage, unethical manufacturing practices or social media – was on 61%, and revenue generation logged 56%.

"Sustainability continues to grow as a strategy for many of the world's largest companies," said Joel Makower, chairman of GreenBiz Group. "But ... companies still have a way to go in order to harness its full value, such as improved efficiencies, reduced risk, and being seen as an employer of choice."

In keeping with the overall trend, 53% of featured companies expected the funding supporting such endeavours to increase in the next 24 months, while 39% forecast that expenditure would be maintained and just 5% foresaw cut backs.

During the coming 12 months, 93% of the pane; said they hoped energy costs would fall due to eco-friendly schemes, while 87% anticipated meeting changing customer demand via this route.

For 81% of operators, enhancing their credentials should help resist competitive pressures, and 80% suggested that new revenue opportunities would follow on from going green.

One broader reason for this matter rising up the corporate agenda was growing shareholder interest, as 66% of the corporations polled had received more enquiries about this matter from investors in the past year.

Meanwhile, 67% of contributors agreed sustainability projects must meet the same return on investment criteria as other schemes across the company, although 20% concurred that the timeframe for potential payback can be longer.

Steve Starbuck, Americas leader of Ernst & Young's climate change and sustainability services, said: "While sustainability initiatives can provide financial returns, their intangible benefits, such as employee retention and reputational advantages should also be factored into the return on investment."

When identifying the stakeholders who were most important in driving eco-friendly activities, customers scored 37%, beating employees on 22%, shareholders on 15% and policymakers on 7%.

Data sourced from Ernst & Young; additional content by Warc staff