[see also a-c in section 5.2]

Many companies also see a marketing value (potential to improve their green image) in pursuing an environmental agenda and introducing voluntary tools, e.g. the ISO1400x series for environmental management systems. Their adoption has a knock-on effect since it demands similar standards through supply chains. The fact that environmental management system (EMS) approaches are about developing regular institutional systems for mainstreaming environment should not be lost on those who are aiming to promote mainstreaming in other sectors: there is much to learn from the EMS approach.

In revising their business plans, many companies respond to the clear economic or ethical benefits of some ‘environmental’ actions (e.g. adopting energy efficient technologies) or signing up to new market schemes such as carbon credits or offsetting.

Investment in a country by large multi-national companies (which often tend to work to higher standards) often stimulates increased attention to environmental issues amongst domestic businesses, particularly where the latter undertake sub-contracts which encourage or require them to improve practices.

Every business is obliged to meet legal requirements designed to protect the environment. For some businesses, fear of prosecution may be the main reason that they consider environmental issues. Others do so because they recognise that protecting the environment can provide significant benefits to businesses in a number of ways - effective environmental practices pay for themselves. Many businesses are addressing environmental concerns as part of their response to the need to demonstrate a commitment to corporate responsibility as well as to mitigate political and social risk and to manage and enhance their reputation and relations with a range of stakeholders: customers, host governments, local communities, regulators, employees, investors and suppliers.

Effective environmental practices can help a business to save money, as it may face financial pressures from higher energy and waste disposal costs and more environmental taxes. A business may also be able to negotiate lower insurance premiums. A range of guides are available to environmental issues that can benefit a business and make it more sustainable.

Socially responsible investment (SRI) is an increasingly significant business driver, especially since the launch of the FTSE4Good index series in 2001. FTSE4Good measures company performance against globally recognised corporate responsibility standards and facilitates investment in responsible companies. Mainstream investors are also increasingly accepting that social and environmental risks pose a threat to long-term shareholder value.

Project finance for major industrial projects has been a key driver in promoting high standards of sustainability performance. The World Bank Group, in particular the International Finance Corporation (the private sector arm of the WBG), have been instrumental in developing, and introducing into practice, a set of standards for responsible performance in business, industry and infrastructure development.

These have set the benchmark standard for other international finance institutions, such as the European Bank for Reconstruction and Development who revised their Environmental and Social Policy in 2008. The IFC standards have been adopted by the Equator Principles, which are voluntary performance standards adopted to date by over 50 investment banks.

The concept of a ‘triple bottom line’ is widely used to describe sustainable development in an organisational context. In the business context, this implies that companies will operate not just to deliver profitability and shareholder dividends (the economic bottom line), but to deliver improved performance against the social and environmental bottom lines.