Companies Committed to Sustainability Outperform Their Peers During the Economic Downtturn

Companies looking for ways to survive in the current economic climate should consider sustainabilty. That's right. Doing good can help a company do well, according to a study released this February by A.T. Kearney, Inc., titled "Green Winners: The Performance of Sustainability-focused Companies in the Financial Crisis.

The study looked at 99 companies identified as having a strong commitment to sustainability and compared their performance with industry averages. The 99 companies were defined by the Sustainability Index and the Goldman Sachs Sustain Focus List.

In 16 out of 18 industries, companies with a commitment to sustainability were the clear leaders in the financial markets. These sustainability leaders outperformed industry averages by 15% over the six months from May through November 2008. From a market capitalization perspective. This averages out to $650 million in protected market capitalization per company.

According to Dr. Daniel Mahler, the author of the study, "We find common characteristics among the leading companies that show that sustainability goes far beyond the narrow definition of being environmentally friendly." These characteristics include

• A focus on long-term strategy, not just short-term gain
• Strong corporate governance
• Sound risk-management practices
• A history of investment in green innovations

Not only do green measures produce immediate cost-savings such as reducing packaging material and decreasing fuel use, but the report suggests that investing in sustainability for the long term may be the best way to protect a company's value through the months -- and years -- ahead.