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State of Green Business 2016 Report

Each year, GreenBiz (in partnership with Trucost) produces its “State of Green Business” Report. One of the most important and widely read sustainability business reports, it highlights key sustainability trends for business for the upcoming year. It also assesses sustainability progress among the US S&P 500 and more than 1600 international companies on the MSCI World Developed Index.

This month it released its ninth annual Report. After the last couple of years of relative disappointment and negative outlooks, GreenBiz sees reasons to be hopeful for 2016. Among the top trends underlying this optimism are:

  • The Circular Economy is revving up.
    While the circular economy is not a new idea, GreenBiz sees reason for believing it will really take off in 2016. The creation of the Circular Economy 100 last year (whose members include such heavyweights as Cisco, Coca-Cola, Dell, Google, Lexmark, Michelin, Philips, Ricoh, and Unilever) shows that circular economy ideas are now being looked at seriously. No longer considered a “futuristic, utopian vision,” circular economy concepts are pointing the way toward a new paradigm for product development.
  • Supply Chains are going high tech.
    Last year’s report singled out global supply chains as a persistent problem, accounting for an unsustainable share of negative environmental and social impacts. And yet, lengthy, complex global chains have remained stubbornly resistant to efforts to increase transparency and create improvement. This year, the report excitedly refers to the “supply chain technology boom” as providing the foundation for finally tackling these problems. Examples of a technology-based solutions include LaborVoices and Good World Solutions, both of which use crowd-sourced real-time information on working conditions from workers around the globe. And other companies, such as Ecodesk and EcoVadis are building comprehensive databases of supplier performance indicators. While the landscape is evolving quickly, these developments provide reason to be optimistic that technology (together with increasing pressure from investors) will play a pivotal role in finally bringing transparency, oversight, and accountability to supply chains.
  • Infrastructure is getting very green.
    Infrastructure projects (including roadways, bridges, and buildings as well as water and energy management systems) are increasingly being created as natural structures, made from natural materials. From coastal management systems in New Orleans to full water management in New York City, green infrastructure projects have been growing rapidly. Along with the increase in projects, the report notes the growth of green bonds that provide financing for these projects. The Green Infrastructure Coalition, launched at the December COP21 meeting in Paris, will promote large-scale investment in the low-carbon, climate resilient economy. The coalition of global investors includes the Principles for Responsible Investment, the Climate Bonds Initiative, and the International Cooperative Mutual Insurance Federation. Together, coalition members represent at least $69 trillion in assets. With that kind of financial heft, GreenBiz believes that 2016 will bring explosive growth in these effective and affordable projects to protect against climate impacts.

The Report concludes with this overtly optimistic observation:

That’s the new promise of sustainability. At long last, it is seen as a catalyst for innovation, not just as a regulatory burden or marketplace demand. Some innovations are financial, such as creative ways to fund both private- and public-sector projects. These include partnerships that spur private-sector investments — smart roadways, green infrastructure or community micro grids, for example, which in the past have been the domain of government or monopolistic utilities, but which are now profitable business endeavors. Other innovations relate to business models, or low-tech solutions to complex challenges . . . All of which is to say, 2016 is shaping up to be yet another exciting year in the world of sustainable business.

Download and read the full Report here.