Energy execs believe sustainability is critical, but companies not embracing concept-- Survey

HOUSTON (AP) -- Many energy executives say sustainability is critical to the success of their operations, but far fewer believe that their companies have embraced the concept, a new survey shows.

Sustainability is an evolving business ethic in which companies set and achieve objectives based on financial, environmental and social performance.

It is often linked with environmental issues but can include ethics, work force diversity and other nonfinancial measures.

More than two-thirds of 81 energy industry executives surveyed by KPMG LLP said they regarded sustainability as an important element of their businesses, but only about one-half said their organizations were currently sustainable. Roughly one-third said they were working toward sustainability, according to the survey being released Monday.

KPMG, an audit, tax and advisory firm, conducted the survey in November. KPMG said respondents included executives from exploration and production companies, electric utilities and independent power producers.

Bill Kimble, who directs KPMG's Global Energy Institute, said companies that invest in sustainability are leaders and gain an advantage over competitors.

''The less-progressive companies are putting themselves at risk as key stakeholders will hone in on this issue,'' he said.

More than half the executives said they believed sustainability would make them more competitive, in part by improving the image of their company.

Yet, less than one-fifth of respondents said sustainability was a permanent agenda item at board meetings, and 29 percent said it had never come up at such gatherings.

Analysts and others familiar with sustainability say the concept relates in part to companies increasing efforts to conserve energy, produce less waste and other initiatives -- in essence, taking more responsibility for their impact on the environment.

Some say acting on the ethic is easier for small, privately held companies than big, publicly traded outfits with stockholders focused on the bottom line. But as big companies, particularly manufactures, face the prospect of taxes on greenhouse gas emissions and penalties for not using renewable energy -- issues on the table in California -- they might be more inclined to embrace sustainable practices, experts say.

Wal-Mart Stores Inc., for one, has said it is encouraging suppliers to become more sustainable. The world's largest retailer also has said it's looking for ways to reduce the amount of nonrenewable fuels used to make the products it sells.

To that end, KPMG said half the companies it surveyed increased spending on research and development in the past three years.

Massachusetts Institute of Technology