Sustainable Business: Aussie companies lead the way in sustainable, profitable practices
Australian companies lead two out of 18 "super-sectors" in an international sustainability index. Westpac and Investa are proving just how much can be achieved when a company focuses on improving its environmental and social performance.
TWO Australian companies have achieved top rankings in the Dow Jones World Sustainability Index, which provides investors with an independent benchmark based on economic, environmental and social criteria.
Westpac was ranked number one in the banking sector for the fifth year in a row, while Investa Property Group topped the financial services sector, moving up to number one from fourth in 2004 and second in 2005. Investa scored 75%, significantly above the sector average of 32%.
Investa sustainability manager Craig Roussac said the diversified property company had exceeded its own energy- and water-saving targets.
"One of our targets was to achieve a 15% electricity reduction over three years. We actually achieved 19.3%," Mr Roussac said. "It just suggests there's plenty of opportunities out there if people want to try," he said.
Another Investa target was to reduce water consumption by 25% by 2006. The actual reduction was 37.9%.
Mr Roussac said the abatements were achieved by investing in items like flow-restrictors on taps, lighting controls and variable-speed drives for motors. Investa also monitors the water and energy consumption and greenhouse emissions of its buildings.
"What we've found is, our investment, we're getting roughly about a 30% return," he said. And 30-odd per cent on top of that, which we're calling return on effort."
He said there had been a strong increase in tenant demand for Investa's buildings.
Westpac also has good environmental credentials, with the sustainability index recognising that "the value of its direct environmental impact resulted in an eco-efficiency well ahead of the industrial average".
The bank achieved a DJSI score of 84%, while the sector average was 48%.
Westpac corporate social responsibility and sustainability adviser Emma Herd said no one initiative was responsible for the bank's success.
"The approach that we take is not to go out hard on one area … but rather to try and move the bank forward one steady step at a time," Ms Herd said. "On the environment side, we've taken a pretty strong stand," she said.
Three years ago, the bank committed to the Equator Principles, which require that the social and environmental impacts of a project be taken into account when a bank decides whether or not to provide finance.
Ms Herd said Westpac strongly believed in having comprehensive, consistent standards.
"Often what you find is, when there is poor environmental and social management there are a lot of other risk factors as well," she said.
"We think that customers do care about those issues and they do want to make decisions based on performance in this area."
ANZ also made the top five in the banking sector, with a score of 76%, improving from its 10th position ranking in 2005.
CEO John McFarlane said in a statement that the bank achieved sector-leading ratings in various areas.
"While we have improved on a number of other criteria such as environmental reporting and supply chain standards, we have more work to do to turn policies and practices into better outcomes in these areas," Mr McFarlane said.
This article first appeared in Business Community Intelligence, November 2006