This week's indicator is 9.1 Gt CO2e, which is the potential annual reduction in global GHG emissions from information and machine-to-machine (M2M) technology by 2020, according to a report by the Carbon War Room. 9.1 Gt is roughly equivalent to the combined annual emissions of the United States and India. But beyond carbon abatement, M2M technology represents an enormous business opportunity: the industry as a whole is projected to be worth nearly $1 trillion by 2020. As the report states, "If we utilize technologies such as M2M to their full potential, 'low carbon' will by synonymous with economic growth and sustainable prosperity, now and into the future."

This week's indicator is 37 percent, which is the percentage of companies reporting profits from sustainability, according to a study published in the MIT Sloan Management Review. This represents a 23% increase over last year. 

This blog was co-authored by Samantha Buechner and Tim Bolger.

It can be difficult to get excited about recycling. Squinting to find the number on the bottom of the bottle, rinsing the gunk out, and putting it in the right bin isn’t always convenient and most consumers never see the end benefits of their recycling efforts. But recycling can be more than the monotonous bottle-to-bin routine. Here are a few examples of companies and organizations that have found ways to recycle various materials and use waste to create value.

This blog was written by Daniel Winokur, Leader at LRN and manager of the EcoStrategy Alliance.

Creating a workplace that values and supports sustainability isn’t easy. If you’ve run into trouble, you’re not the only one. When working with our partners, we see many sustainability departments initiating employee engagement programs seeking to deepen sustainability values and formalize them into business-supporting behaviors. But the truth is, many of these programs simply don’t work. They don’t pull the right levers to truly impact employee culture, so they lose out on behaviors that would reduce risk, increase productivity, and lower operating costs.

Recently, I was part of a GreenOrder team working with a client partner that is a home and property care service provider. Despite employing industry-leading integrated pest management techniques, this partner was struggling to communicate the safety of their products to their employees and customers. They’re not alone. Even for highly responsible companies committed to transparency when it comes to their stakeholders, communicating product risks effectively is a challenge. Why?

A wide range of companies are conscious of the environmental impacts of their products and services. A smaller number of leading companies have adopted a stewardship mindset and are developing innovative best practices in supply chain management. These companies are experimenting with techniques that match their brands as well their footprints. Levi’s has studied and visualized the life cycle of a pair of jeans, Walmart is harnessing massive data from its suppliers.

In studying supply chain innovation, I got to thinking: what input lies at the foundation of every single supply chain? The answer is energy. Since energy is such an integral input to any modern supply chain (not to mention a central piece of our climate crisis), I thought I’d flip the question on its head: how can the energy industry itself improve sustainability across its own supply chain?  And what lessons can the energy sector learn from leaders in other industries?

In the energy sector, the majority of attention will remain focused on fuel stock – the fuel used for power generation and its method of extraction – as the key to a truly sustainable industry. While this focus is appropriate, it doesn’t capture the scope of the opportunities across the supply chain. Think, for example, of the 120 million utility poles used for electricity transmission in the US alone; or the tremendous amount of water used in resource extraction for energy production and generation;  or even the sustainability issues within the renewable energy space itself. The growth potential for sustainability improvements in the energy sector supply chain is limitless.

As the energy industry organizes itself to address sustainability throughout its supply chain, here are a few guiding principles to consider:

My colleague Truman Semans and I wrote here last week about the power of prizes to inspire the ingenuity needed to solve some of most pressing problems of our time, chief among them the need for environmental innovation.

But despite their cachet and impressive track record, prizes are not a cure-all for our every woe [PDF]. Just as there are important ways that they are underutilized, for instance by the government as a tool to stimulate technology innovation [PDF], prizes are ill-suited for other circumstances.

For example, nearly three years ago Richard Branson announced the Virgin Earth Challenge -- a $25 million prize for the first to develop a commercially viable design for removing at least one billion tons of carbon dioxide from the atmosphere per year for 10 years. But despite 2,500 entries, the prize has gone unawarded and is currently being reevaluated.

(co-authored with Dan Saccardi, Associate)

Some companies are betting big that the new Prize -- in terms of sheer billions in wealth available for the taking -- is to be found in the natural gas shales found the world over. That certainly seems sensible if you view the world from the perspective dominant in industry when Daniel Yergin published his seminal book The Prize -- especially with the mounting consensus about Peak Oil, on which even the International Energy Agency now agrees.

But the greater Prize, if you're looking for total value creation potential by companies and for society, is environmental innovation -- for low-carbon energy generation, electric and hybrid vehicles, energy efficiency, and other clean technologies. This is even starting to show in the size of deals done by major energy companies in building their reserves for growth -- even ten years ago, a hundred million dollars was a huge deal in cleantech. This year, we saw deals such as Shell and Cosan's $12 billion joint venture. That stacks up with any of the big unconventional gas deals done in the U.S. this year, such as Chevron's entry in the space with its proposed acquisition of Atlas last week.

As environmental strategy consultants we believe in leveraging market forces to solve our environmental crisis. If financial analysis integrated externalities - such as pollution, contribution to climate change or biodiversity loss - then company valuations would reflect their true impact on our economy, net of their impact on our environment.

Financial markets are slowly moving in this direction. More and more data providers, from niche player RiskMetrics to giants Bloomberg and Thomson Reuters, are reporting on environmental, social, and governance issues from greenhouse gas emissions to human rights and everything in between. And with good reason – ESG-based investments are expected to reach $26.5 trillion by 2015 (PDF).

One thing that strikes me though is how much emphasis there is on quantifying risks, and not evaluating growth opportunities. There is a paradox here. In financial valuation, the rate of growth typically matters more than other dimensions. That’s why an internet darling with greater growth potential and an unclear path to profitability may be valued higher than a company with solid, consistent dividends but limited upside. But conversely, when it comes to sustainability, analysts seem to place greater stock in managing risks than developing new markets.