2007 Sustainable Business Awards

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As companies have geared up their internal programs, judges have moved away from chronicling companies' ability to offset their negative impact on the environment—the damage done by building and waste from plants—to consider proactive programs and, especially, energy-saving products. "How do you compare Philips or Nike with a company like Comverge?" asks Rafael Coven, another judge and the managing director of Baltimore research firm Cleantech Indices. "You can't, except to say all are trying to develop sustainable products by changing their operations."

Green Thinkers Are Good Leaders

Standards used by stock and environmental analysts to gauge performance on environmental issues can also indicate a generally safer investment as well. Not only have many of the award winners made environmental gains without adversely affecting their financial performance but, the theory goes, they could be less susceptible to the green-related scandals that have rocked some companies. Recent revelations that some of Mattel's (MAT) Chinese contractors used lead paint in products, and allegations that the greening of BP (BP) was largely a PR stunt, pummeled the companies' stock prices. "The greenest companies tend to have the sharpest management teams," argues Garvin Jabusch, a partner in Green Alpha Advisors, an investment advising firm based in Boulder, Colo., and the former manager of the Sierra Club Stock and Equity-Income funds. The management skills required to execute sophisticated sustainability plans align with the ability to guide a company towards long-term growth, he says.

The chief constant? Executive evangelists are still necessary in order to turn a company green. Jabusch cites the example of Interface, which this year won in the green building category. The company, which designs and produces modular carpets, received kudos for its decade-long attempt to remake itself from an old school industrial manufacturer into a more sustainable producer. Ray Anderson, Interface's founder, has spearheaded the turnaround, which aims to counter any of the company's negative effects on the environment by 2020 and includes programs such as ReEntry, which allows customers to recycle carpeting.

"They started off as just another carpet company, and the chairman has done a 180," says Jabusch. "Top-driven initiatives work a lot better."

For a closer look at the winners, see: slide show

Matt Vella is a writer for BusinessWeek.com in New York.