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May 16, 2012
Race Between Sustainability and Over-Consumption Continues
    by Robert Kropp

The third annual MIT survey of corporate executives suggests that sustainability is increasingly a management agenda item, while a report from WWF finds that global consumption patterns are still unsustainable.

MIT Sloan Management Review and Boston Consulting Group (BCG) have published their third annual survey of corporate sustainability efforts, and the responses suggest that sustainability has become a permanent fixture on the agendas of most executives and managers.

According to the nearly 3,000 executives from the commercial sector surveyed, sustainability is now part of the permanent management agenda at 70% of companies. Furthermore, two-thirds of respondents state that sustainability is necessary to be competitive in today's economy, and almost one-third say that sustainability contributes to increased profitability.

However, "This rosy picture must be balanced against another set of data," the report warns. Sustainability may have become a permanent part of the management agenda at most companies by now, but it ranks only eighth in importance among management's agenda items. Also, the report continues, "Economic growth continues to deplete the planet's stock of natural capital, despite the efforts of many companies to minimize their impacts."

The degree to which the planet's stock of natural capital is being depleted is outlined in a second report, from the World Wildlife Fund (WWF). According to WWF, "The Living Planet Index continues to show a 28 per cent global decline in biodiversity health since 1970."

WWF utilizes a measure it calls the Ecological Footprint, measured in global hectares (gha), which indicates "a consistent trend of overconsumption."

"This discrepancy means that we are in an ecological overshoot situation," WWF states. "It is taking 1.5 years for the Earth to fully regenerate the renewable resources that people are using in a single year."

Isolating the Ecological Footprint of low-income countries, the report finds a "potentially catastrophic" decrease of 60%. "The world's poorest people feel the impact of environmental degradation most directly," the report observes. "Without access to land, clean water, adequate food, fuel and materials, vulnerable people cannot break out of the poverty trap and prosper."

So what is to be done? According to WWF, biodiversity must be preserved through such means as more efficient production and sustainable consumption. Also, "Redirected financial flows that support conservation and sustainable ecosystem management are therefore an essential enabling condition." Equitable resource governance is also essential.

The survey from MIT and BCG notes that institutional investors are pressuring companies to adopt sustainability measures to an increasing degree. It quotes an executive from Duke Energy, who states, "In addition to more traditional 'socially responsible investors,' we are finding that some of our mainstream investors are now looking at sustainability performance as an indicator of overall business value."

Yet, as WWF points out, "The over- exploitation of resources and damage or destruction of ecosystems are highly profitable for a few stakeholders in the short term; while the long-term benefits of protecting natural capital are inadequately valued or not valued in an economic sense at all."


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