This is Part Three of a five-part blog series, Aligning Profit and Environmental Sustainability. Each installment explores solutions to help businesses overcome barriers that prevent them from integrating environmental sustainability into their everyday operations. Look for these posts every Thursday.

This post also appears on Greenbiz.com.

A large, multi-national company likely spends hundreds of millions of dollars every year on new projects. How these projects are designed, constructed, and operated clearly impacts costs in the short-term, but also poses huge implications for a company’s “sustainability footprint” in the long-term.

A major challenge is that most corporate sustainability experts within a business are not involved in capital budget requests at the outset. A company’s financial leaders make investment decisions with upfront costs and projected revenues in the front of their minds. They are far less likely to take into account a project’s potential environmental risks and benefits. Not coordinating financial and sustainability decisions can lead to projects that are cost-efficient to build today, but may not hold up to sustainability pressures over their lifetime. For example, a company might invest in a factory that is inexpensive to build, but then realize that it’s in a location that locks them into buying only fossil fuel-based energy sources.

The lack of integration between financial and sustainability-related decision-making is a main barrier to scaling truly impactful corporate environmental sustainability. But as WRI found in its new working paper, Aligning Profit and Environmental Sustainability: Stories from Industry, there are companies who are starting to show us ways of overcoming this challenge.

UPDATE 4/11/13: After this blog post was published, the OECD released updated figures for 2010 and 2011. The data still shows a decrease in commitments for adaptation, mitigation, and climate finance, as this blog post states. However, adaptation expenditures were 3 percent higher in 2011 than in 2010, as opposed to unchanged. (View updated figures.) The changes in the numbers are a result of donors entering new data for previous years or updating their old data. Preliminary data for 2012 shows that aid to developing countries continued to fall. Detailed figures for 2012 will be released in June 2013.

At the 2009 U.N. climate change conference in Copenhagen, developed nations committed to provide a collective $100 billion per year by 2020 to help developing countries mitigate greenhouse gas emissions and adapt to climate change’s impacts. Recently, the Organization for Economic Co-Operation and Development (OECD) released some surprising new data on this pledge. The figures indicate that developed nations’ recent climate finance contributions have fallen rather than risen toward the level of their 2020 commitment.

A Look at the New OECD Data

The OECD is a consortium of 34 wealthy countries. Among other joint initiatives, it provides a platform to monitor and share statistics on aid flows and climate finance contributed by its members. Most OECD members report both their climate finance expenditures and commitments using the “Rio Markers” (see text box), and the OECD secretariat periodically makes these numbers public. OECD members’ climate finance contributions represent a significant portion of the collective $100 billion commitment, so the numbers reported by the OECD give a good indication of developments in the climate finance field.

Surprisingly, new OECD numbers show that while adaptation expenditures in 2011 remained the same as in 2010, expenditures for mitigation activities decreased. Plus, the total commitment for climate finance decreased from $23 billion in 2010 to $17 billion in 2011.

While a “commitment” refers to the total amount of money a country will spend on an adaptation/mitigation project over a multi-year period—which is reported at the beginning of a project—an “expenditure” refers to the amount a country spends in a particular year on adaptation/mitigation activities. In January 2013, the OECD updated its data for 2011. It is difficult, of course, to predict or analyze trends based on only two years of data (the only data that’s currently available on OECD climate finance commitments). But given developed nations’ agreement to scale up climate finance significantly by 2020, this decrease is surprising—and could be concerning.

As the old adage suggests, it is important to see the forests for more than just the trees. While an estimated 500 million people depend directly on forests for their livelihoods, the entire world depends on them for food, water, clean air, and vital medicines. Forests also absorb carbon dioxide, making them critical to curbing climate change.

Despite some encouraging anti-deforestation efforts in places like Brazil, Indonesia, and Africa, globally, forests are under threat, particularly in the tropics. Between 2000 and 2010, nearly 13 million hectares of forests were lost every year. About 30 percent of the global forest cover has been completely cleared, and 20 percent has been degraded.

This dilemma begs the question: What is the outlook for forests in 2030? Are we missing the opportunity to preserve forests and ensure they continue to deliver the goods and services we need for a growing global population? How can we use forests to build a thriving global green economy?

Asking these questions is important. Finding answers to the challenges they raise is imperative.

This post also appears on Greenbiz.com

This is Part Two of a five-part blog series, Aligning Profit and Environmental Sustainability. Each installment explores solutions to help businesses overcome barriers that prevent them from integrating environmental sustainability into their everyday operations. Look for these posts every Thursday for the next four weeks.

As companies tackle environmental sustainability initiatives—such as developing a climate change strategy—early steps involve getting the CEO on board and committing to public goals. But the process doesn’t stop there. In fact, that’s only the beginning. Companies also need to find the money to implement projects and make good on the promised goals—all while delivering financial results.

Finding the Money: A Case Study from Johnson & Johnson

Finding the funds for environmental sustainability initiatives can be a tall order, especially since many companies’ sustainability decisions are made separately from its financial ones. Johnson & Johnson experienced this conundrum firsthand. Back in 2004, the company had a public greenhouse gas reduction target, but was not on track to reach it. Although the emission-reduction projects it identified could save energy and operating costs, managers were having difficulty getting approval for the capital they needed. Core business priorities like new product development were competing with the money the company had earmarked for its sustainability efforts.

Managers, therefore, decided to re-think the way the company allocates internal capital. Johnson & Johnson started putting aside $40 million each year for “win-win” projects—greenhouse gas (GHG)-reduction initiatives that also reduce operating expenses, such as solar photovoltaics. Projects like these sometimes require more upfront capital, but benefit from more predictable returns and lower operating costs than conventional energy systems. The strategy reduces the company’s risk exposure over time and lowers its operating budget.

Fast forward to today and this approach has enabled Johnson & Johnson to reduce its GHG emissions by more than 138,000 metric tons through projects that have an average return of 19 percent. This emissions-reduction is equivalent to the electricity use of approximately 21,000 homes. The company met its initial GHG-reduction target in 2010 and renewed its commitment with a new 20 percent absolute reduction target by 2015.