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The State of Green Business 2018: Top Stats & Takeaways

GreenBiz and Trucost, part of S&P Global, recently released the annual "State of Green Business 2018" report.

As usual, the report is full of over two dozen metrics that, taken together, give us a snapshot of the sustainable business landscape. 

A few statistics were especially eye-catching. We've highlighted them below, along with insights from the report:

state of green business statistics

Image credit: Trucost and the 2018 State of Green Business report

The cost of environmental impacts is rising.  

At the time of the survey, the natural capital costs of the top 1,200 global companies exceeded $4.1 trillion -- surpassing the 2013 high water mark. The largest of these impacts come from land and water pollution and GHG emissions.

To put those numbers in perspective, companies' environmental costs were nearly two times higher than their net income.If companies had to internalize these costs due to new regulations or carbon taxes, it would eat up their profits. 

Corporate GHG emissions continue to decrease, reaching the lowest level since 2012.

While the 1% reduction in GHG emissions represents a step in the right direction, it falls short of the reduction needed to reach the "2 degree Celsius" target outlined in the Paris Agreement. 

Despite companies' growing commitment to reduce their environmental impacts, corporate water use doesn't show any significant decrease and water pollution actually increased in 2016. Clearly, there's still a long way to go. 

Companies are becoming more aware of environmental risks. 

More companies are assessing and disclosing risks, with 33% more companies disclosing GHG emissions in some part of their value chain from 2012 to 2016.

In addition to monitoring and reporting on environmental risks, nearly 50% of top US companies and 60% of global companies reported that they're proactively investing in strategies to reduce their environmental impacts -- a 7% increase since 2012. 

Companies are responding to customer demand for greener products and business models. 

"Going green" is no longer seen as a fluffy concept for hippies -- it's a major element of companies' strategy to reduce environmental risks and opportunities.

In fact, 75% of companies consider consumers as one of the key drivers of risks and opportunities related to carbon emissions from their products and services. 

It should come as no surprise, then, that 10% more companies set carbon and water targets in the past five years. 

Corporate sustainability will be a major factor in companies' access to capital. 

In addition to customer demands, companies are also facing pressure from investors to green up their operations. 

Ten more stock exchanges have introduced an environmental listing requirement, for a total of 68 exchanges and 40K companies listed in these exchanges.

Similarly (and not surprisingly) climate-related risks and opportunities are a big discussion point among investors. 

Additional reading:

Climate Risk Management Guide

Corporate Sustainability Reporting: You're Doing It Wrong

What is ISO 14001 Environmental Management?

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