by: Joel Makower

Today marks the release of our second annual State of Green Business report, our assessment of how, and how well, companies are doing from an environmental perspective. The free 62-page report (download here) offers 10 trends of the past year as well as our GreenBiz Index, a set of 20 indicators that, in aggregate, provide a picture of U.S. companies' environmental achievements.

This is an auspicious time to be taking a measure of corporate environmental performance. On the one hand, the past few years has seen an acceleration of green activity — most of it behind the scenes, only a small part of it actively promoted by companies. The corporate sector — all of us — have been roiled by a litany of energy and environmental challenges: climate change, fuel prices, global security, and growing concerns about the availability of water, the toxicity of everything from food to toys, and the backwash of technology in the form of their skyrocketing energy consumption and e-waste. All of which creates an environment ripe for innovation, from both a technology and policy perspective.

On the other hand, there are tectonic shifts: the once-in-a-generation economic turmoil, the new regime in Washington talking about "green jobs" and a "green economy."

We find ourselves in uncharted waters.

One could reasonably assume that amid these shifts, the greening of mainstream business would have fallen off the map. Companies, after all, are flailing financially, struggling to get through the economic trough — and trying to figure out when it will occur and how deep it will be. So, too, with the changes in Washington. There are endless questions: How will regulations and policy shift? What green laws will appear or disappear? How will the economic stimulus package change the shape and slant of the playing field? When will carbon regulation — taxes or a cap-and-trade system — come to fruition and how will that affect operations, investments, and strategy?

During such times of turmoil and transition companies typically sit on their hands, paralyzed or simply waiting until things settle down. As such, green should fall by the wayside.

But it hasn't. And that's a sea change by itself. In past recessions and political upheaval, companies have stopped in their tracks, cut their budgets, and laid off their environmental professionals until better times or greater certainty. They're not doing so this time around. Even as others around them lose their jobs or see their staffs and budgets shrink, environmental professionals are holding on.

Consider that since November 4 — Election Day — we've reported on the following stories on GreenBiz.com:

That's just a sampling, of course. There's a lot more where that came from.

It's all good. But is it good enough?

That's the question we set out to answer 18 months ago, when we began creating the first State of Green Business report, released a year ago. And in the spirit of continuity, this year's conclusion isn't all that different from last year's: For all the green initiatives and achievements made by companies large and small, they aren't really moving the needle on the problems that matter most: climate change; toxics in our air, water, and food chain; and transformations in economic activity toward a more sustainable economy.

Consider climate change: Absolute greenhouse gas emissions grew 1.4 percent in 2007 over 2006 (the most recent data available) though it shrank 0.6 percent as a unit of GDP — the smallest annual decrease since 2002. The U.S. has steadily reduced the amount of greenhouse gases produced per unit of GDP since 1990, when the greenhouse gases per GDP were roughly 28 percent higher than in 2007, largely because of strides in energy efficiency. But overall emissions are going up — the opposite direction from where President Obama — and most scientists — say we need to be to stem the worst impacts of global climate change.

Or consider electronic waste: Despite widespread discussions in boardrooms and legislatures about the dangers of e-waste, we recycled only a tiny fraction more e-waste in 2007 than the year before, even as the amount of toxic electronic equipment entering the waste stream grew substantially. In 2007, the most recent year for which data are available, we collected only 18 percent of the 1.32 billion tons of computers available for recycling, according to federal data.

To be sure, there are things worth celebrating. We're using an ever-shrinking amount of energy, water, and toxic materials to produce a unit of GDP. Green building is on the rise, spurring new technologies that save energy and money while creating more healthful workplaces. There is a green race taking place in the automobile industry, with every major manufacturer planning to introduce electric vehicles. The leading consumer product makers and retailers are starting to rigorously assess the environmental impact of their products using sophisticated metrics, sending signals along the supply chain that tomorrow's products will need to hew to higher levels of environmental responsibility.

But, as we found in our research, we're barely scratching the surface from an environmental perspective. As much as companies have done to clean up their act, they've got a long, long way to go.

You probably knew that intuitively, as did we. But our State of Green Business report aims to bring some rigor to those assessments. Is there truly a fundamental shift taking place in business — one that will have a lasting salutary effect on planet Earth? Or are companies simply nibbling at the edges of these problems?

Optimistic as I am most days, I fear that the answer tends more toward the latter.

Original Post: http://makower.typepad.com/joel_makower/2009/02/the-state-of-green-business-2009.html

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