Sustainability as a Business Paying off Big, Says Conference Board Study

Anyone who has doubts about the ability of the “sustainable” label to drive sales and profits for multinational corporations should take a look at new research about to be released by The Conference Board.

While revenue growth among companies in the S&P Global 100 Index averaged 15 percent over the past four years, sales of sustainable products and services grew 91 percent -- six times as fast, according to a study revealed at the Sustainability Summit in New York Tuesday.

“There isn’t really a sustainable product. It’s about having environment advantages over the existing alternative, “ said Thomas Singer, principal researcher for The Conference Board, providing a bit of a disclaimer before jumping into his research findings.

For brands that are able to develop products that are better for the planet, there appears to be a materially positive impact to growth, Singer told attendees at The Conference Board’s Sustainability Summit. On average, each company researched now generates $12 billion annually from sales of products deemed sustainable.

Sustainable products accounted for an average of 21 percent of total revenues among the 100 companies examined, according to the study, “Sustainable Products, Innovation and Business Growth,” scheduled for release June 30.

Spending on research and development of sustainable products and services rose from 33 percent to 38 percent of the R&D budget over the past four years, the study revealed. The average annual spend allocated toward sustainable products is approximately $1.5 billion per company.

Thirteen case studies were compiled by The Conference Board research team.  Among them:

• Philips’ Slimlight LED replacement light bulbs were highlighted as a success because the product is more recyclable, takes fewer resources to manufacture, uses fewer toxic materials and saves energy.
• DuPont’s production of cellulosic ethanol was featured as a sustainable biofuel that doesn’t compete with food sources and raise commodity prices.  To manufacture cellulosic ethanol, DuPont uses pieces of corn that otherwise would go to waste.
• Kimberly Clark’s Scott Naturals was included in the research.  The tube-free bathroom tissue eliminates sending to landfills 17 billion tubes a year, enough to fill the Empire State Building twice.