In nearly every post I describe the reasons business should go green. I tell you about social responsibility, about the fact that potential employees find sustainability attractive and the assurance that you may save some money in the long run. What if I told you that going green could give you a significant edge over other businesses in the same sector? Well, its true. Recently, the Carbon Beta Equity Performance Study came to the conclusion that there exists a "strong, positive, and growing correlation between industrial companies’ sustainability in general, and climate change in particular, and their competitiveness and financial performance." Basically, this means that companies who practice environmental sustainability have a competitive edge in their industry.

Innovest, an investment research firm, launched the study in order to better understand the effect of sustainability upon potential business investment. What they found was a much more substantial difference than most had predicted. In fact, the report found that, "In the longer term, the out-performance potential will become even greater as the capital markets become more fully sensitized to the financial and competitive consequences of environmental and climate change considerations”.

While this may be great news for some, it does not mean happy days for all. The report noted that the ’strong and postive’ correlation between a business’s performance and its sustainability was not necessarily true for every sector of business.

Further, the report found that potential investors are having difficulties figuring out which companies are truly sustainable. Because of inadequate reporting methods, investors have to do a substantial amount of leg work to figure out which companies have a comprehensive sustainability program in place, and this may be a deterrent in future investing. As the report notes, disclosure information is notoriously unreliable, inconsistently reported across companies and over time, and generally not validated by independent third parties… Emissions data alone provides less than 25 percent of the information a sophisticated investor requires."

The folks at Innovest think that the method of disclosure is a pretty big obstacle for investors looking for a truly green company. As founder Matthew Kieman puts it, "It is increasingly critical that performance-driven investors move beyond simply pressing for greater company disclosure," he said. "We are now seeing them begin to demand the sorts of investment tools, research and products they need to turn mere information into superior investment decisions and performance." Superior investment decisions, indeed! As business owners and conscious citizens, we really need to take measure that would ensure that investors looking to put money into a green company had the resources to make informed decisions. Not only will it be good for green minded investors, it will bonly serve to increase the green business edge.