Sustainable-business practices seen ‘lacking’

Most companies have only a “skin-deep” commitment to sustainable business practices, a new report says.

“Sustainable Performance,” a new study by management consulting firm Arthur D. Little, is based on research examining companies’ reporting of sustainable performance.

“There are clear signs that a powerful force that does have the ability to effect a rapid and deep-rooted change in corporate behavior is emerging,” Annette Malmberg, senior manager in Arthur D. Little’s Energy, Utilities, Strategy and Organization Practice, said in a statement.

Yet legislation, regulation and consumer demand have influenced corporate behavior superficially, providing incentives for only the most basic reforms.

Consumers are as yet a weak force in encouraging corporate responsibility, says the study, and media reports are the only measure of individual businesses’ sustainability that reach most customers.

Yet investors increasingly recognize environmental performance as indicative of long-term success.

Sustainability indices, whose assets in Europe grew 40 percent between 2005 and 2006, routinely outperform market indices, the study says, and share-price growth is closely linked to inclusion in these indices.

Only those companies that take the lead in nurturing corporate-responsibility practices now will reap the benefits of the current sustainability wave, the report concludes.

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