Can a company profit without environmental impact?

In his article, “Can companies grow, and profit, with no impact?”, Joel Makower at greenbiz.com looks at a report from Deloitte that says there are some companies that are ready to help transform their industries:

A new report, from Deloitte’s Netherlands office, researched 65 companies in 10 industries on their readiness for a “green and inclusive economy.” The Zero Impact Growth Monitor 2012 (PDF) reveals that only six of those companies — Puma, Nike, Nestlé, Unilever, Natura and Ricoh — “have reached a level on which they are ready to take radical steps to transform their industries.”

The report is the result of a 2011 collaboration between Deloitte Innovation and John Elkington in the run-up to the publication of Elkington’s book, The Zeronauts, which looks at individuals and organizations that try to minimize their natural and societal impact to a zero level. The report summarizes the outcomes of aZeronauts Symposium held this past June and the Zero Impact Growth Monitor 2012. Deloitte Innovation andVolans, Elkington’s firm, hope to build a Zero Impact Growth Community focusing on "innovations in measurement, leadership and new business models."

Even though this report shows that there are companies able to start transforming toward zero impact industry, there are still some hurdles that need to be addressed:

 The majority of the companies “are still vague about their strategic growth ambition in a world where ‘growth as usual’ is not an option anymore.”

The report also reveals four key gaps that decrease the ability of companies to move forward in their sustainability journey:

  • Comparability gap — a lack of consistent definitions and descriptions that companies use to explain their sustainability efforts in the various components examined.
  • Implementation gap — a wide discrepency of implementation effectiveness among companies that have proposed ambitious sustainability strategies.
  • Balance gap— an overall tendency that environmental goal-setting is more consistent than social goal-setting in supporting overall strategies, primarily because it is easier to monetize environmental benefits and, therefore, easier to assess their contributions to overall economic success.
  • Gaps in and between industries — while the research focused only on the so-called “leading companies,” there are still considerable differences, even within the same industry.

That last point is noteworthy. Said Deloitte: “We have seen the biggest gaps in some of those industries that will see the highest EBITDA loss in case of the internalization of additional external costs.” In other words, the companies that could face the biggest hits to their bottom lines if they are required to account for their environmental impacts are some of the sectors least prepared to do so.

This report raises both good news and questions about the state of industry’s environmental impact. However, like Joel Makower points out:

The report is, at minimum, an important conversation starter that should be the basis for every sustainability conference and forum going forward. It's high time we had some bold, audacious thinking in this space.

You can read the entire article here: http://www.greenbiz.com/blog/2012/07/30/here-zero-can-we-grow-no-impact