Stiff economic headwinds, clean-tech controversy and a toothless regulatory environment gave sustainable business a sinking feeling during 2011, according to the fifth annual GreenBiz “State of Green Business Report.” However, advances in areas such as clean energy patents, sustainable mobility and even green gamification are signs that innovation will lead the industry forward.

“People expected clean-tech and corporate sustainability efforts to grind to a halt with the global recession in 2011,” said Joel Makower, a principal author of the report and executive editor of GreenBiz.com. “While some key indicators, such as toxic emissions and energy efficiency, are flattening or declining, we’re seeing that companies are more committed than ever to making sustainability a part of their core business strategy. They’re integrating green practices into all levels of their company, and looking to sustainability to drive innovation, reduce operating costs and, in many instances, unlock new revenue opportunities.”

As for what’s driving the trend, check the nearest C-suite. CFOs are reportedly getting more involved in corporate sustainability issues. According to a 2011 survey by Ernst & Young and GreenBiz, 65% of CFOs are now engaged in sustainability. This shows that companies recognize the material risk related to such issues as energy supplies, greenhouse gas emissions, toxic ingredients in products and water management. This trend also reflects growing pressure from shareholders to mitigate environmental risks and provide increased disclosure about environmental impacts.

This year’s report also highlights companies that are using innovative ways to engage customers and employees in sustainability initiatives. Known as “gamification,” businesses use the idea of points, badges, and other “game mechanics” to incentivize and reward good green practices.

For more information, visit www.greenbiz.com.