According to the 2012 Carbon Disclosure Project (CDP) report, sustainability makes companies more competitive and offers investors better returns. This is driving an increasing number of publicly traded companies to embrace sustainability as part of their long-term strategy to combat climate change. The CDP gathers information for investors about the environmental policies of large companies and the environmental risks they face. The CDP has created an index to recognize the world’s best companies called the Carbon Performance Leadership Index (CPLI). The companies that make it onto these lists tend to generate superior returns for investors.
“Our focus is less on payback periods and more on targeting environmental investments to be ‘value positive,” Deirdre Mahlan, Diageo’s CFO, said. “It is insufficient, and even irresponsible, to consider only short term payback when making investment decisions.”
The Carbon Disclosure Project’s report concludes: “Those companies that have an awareness of long-term climate-change risks and opportunities reflected in their business strategy will gain strategic advantage over their competitors.”
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Richard Matthews is a consultant, eco- entrepreneur, green investor and author of numerous articles on sustainable positioning, eco-economics and enviro-politics. He is the owner of The Green Market Oracle a leading sustainable business blog and one of the Web’s most comprehensive resources on the business of the environment. Find The Green Market Oracle on Facebook and follow The Green Market Oracle’s twitter feed.