Ok, it’s not quite the state of the union, but the annual State of Green Business (SOGB) report, put together by my friend and colleague Joel Makower, is becoming a big deal in the world of green business, and for good reason. It should be required reading for anyone working at the intersection of business and sustainability.
This year’s report was released today at the first of three State of Green Business forums — we’re in San Francisco this week, Chicago next week and Washington D.C. on Feb. 16-17. It’s useful because it lifts us above the day-to-day news cycle to identify major trends and ask big questions.
“Are we making progress, are we losing ground or are we holding steady?” Joel asked this morning, at SOGB San Francisco.
The answer, not surprisingly, is all of the above. Corporate commitments “are broader and deeper,” Joel said, citing in particular the plans unveiled in the last year by consumer products giants like Unilever and Procter & Gamble. “But progress is incremental. We’re still doing less bad, which is not the same thing as doing good.” We’re seeing more corporate transparency, more “green chemistry,” and progress when it comes to setting standards for companies and products.
The SOGB report looks at 10 trends and measures a basket of indicators that assess the progress that business is, or isn’t, making in key areas.
Here’s one encouraging indicator:
Clean tech investments: They’re growing again, after an understandable dip during the recession. The number of clean tech patents is growing, Electric vehicle companies raised money, as did solar firms. “More and more of the investment is coming from big companies,” Joel noted. The SOGB report draws on date compiled by Ernst & Young which reported today:
US venture capital (VC) investment in cleantech companies increased by 8% to $3.98 billion in 2010 from $3.7 billion in 2009 and deal total increased by 7% to 278, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource.
This is good news because only through clean tech innovation do we have any hope of moving corporate America towards a more sustainable footing. To put the $4 billion in context, that’s still well below the $5.75 billion invested in the peak year of 2008.
Here’s one that’s not so encouraging:
Carbon intensity: While many big companies have pledged to either reduce their greenhouse gas emissions in absolute terms, or to cut emissions per unit of output (which is essentially about energy efficiency), they aren’t doing nearly enough. (Click on the chart to enlarge.) Research from the Carbon Disclosure Project suggests that the targets set by U.S. companies will not enable the country to achieve President Obama’s stated (and modest) goal of reducing emissions 17 percent below 2005 levels by 2020.
This would require a 1.05 percent average annual absolute reduction rate; instead, emissions of S&P 100 companies are growing at a rate of 0.36 percent a year, “creating a Carbon Chasm between current emissions trends and required cuts,” says CDP.
Since there’s no more important issue than climate change, the fact that companies aren’t doing enough is, or should be, a big, big worry. As Joel said: “That’s simply inadequate. At this rate, we’re simply not going to get there. It’s not happening fast enough.”
There’s much, much more in the report, which is available as a free download.
Better yet, join us next week in Chicago or the following week in Washington. We’ve got a great lineup of speakers. I’m looking forward to interviewing business and government leaders including David Crane of NRG Energy, Paul Anastos of EPA, Jeff Swartz of Timberland and Seth Goldman of Honest Tea. We’ll also hear from execs from Nike, IBM, Schneider Electric, Campbell Soup, BASF, Avon, among others. GreenBiz conferences are jam-packed with interesting people, new ideas and networking opportunities galore.