Daily Environment Report™ Reproduced with permission from Daily Environment Report, 204 DEN A-15, 10/22/14. Copyright ஽ 2014 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com Sustainability Companies Advised to Better Explain Business Value of Sustainability Efforts ompanies should better communicate how their sustainability initiatives are creating business value, Daniel C. Esty, a professor of environmental law and policy at Yale Law School and former EPA official, said Oct. 21. Speaking at an event on sustainability reporting hosted by the Environmental Law Institute, Esty said the corporate sustainability stories that are ‘‘easier to tell’’ and ‘‘easier for markets to appreciate’’ are stories about reduced waste, such as cutting energy or water use, because they are easily translated into cost savings. The ‘‘harder story to tell’’ is how sustainability initiatives are helping customers save money or reduce emissions or delivering other kinds of value, he said at an event on sustainability reporting hosted by the Environmental Law Institute. Esty said companies should tell their sustainability stories in a language that mainstream investors understand by focusing on growth, productivity and risk. C Sustainability-Driven Growth. Growth—including growth in revenue, growth in profitability and future growth potential—is ‘‘the core thing that investors care about,’’ he said. ‘‘Frankly, I think there are companies that have done remarkable things in their sustainability initiatives in COPYRIGHT ஽ 2014 BY THE BUREAU OF NATIONAL AFFAIRS, INC. this regard but have not been able to tell that story in an interesting and compelling way,’’ Esty said. One company that has done a good job of reporting on sustainability-driven revenue growth is DuPont, according to a recent paper from Esty and co-author David A. Lubin. DuPont reported that revenue from products that reduce greenhouse gas emissions rose from $100 million in 2007 to $2 billion in 2012, the paper said. At the same time, revenue growth from products based on nondepleteable resources outpaced the company’s overall revenue growth by a ratio of more than 5:1. Focusing on Productivity, Risk. Other companies that are successfully reporting on how their sustainability efforts are accelerating revenue growth include GE, through its Ecomagination branding, and KimberlyClark, which reported that about 22 percent of net sales in 2012 came from ‘‘environmentally innovative products,’’ the paper said. ‘‘I think with this growth, productivity and risk model, we will be able to speak to the investor community—the mainstream investor community—in a very important way about how sustainability has become a strategic core element of companies that are going to succeed in the 21st century,’’ Esty said at the ELI event. BY ANDREA VITTORIO To contact the reporter on this story: Andrea Vittorio in Washington at [email protected] To contact the editor responsible for this story: Larry Pearl at [email protected] ISSN 1060-2976