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| Investors Really Do Care About Sustainability Theres a Gap Between Them and Corporate Executives
Corporate CEOs, CFOs and others in the C-suite typically ask, “do investors really care about corporate sustainability…or is it a fad, a PR thing?” MIT Sloan Management Review and The Boston Consulting Group (BCG) set out to explore that question. The answer is in their recently released report: “Investing for a Sustainable Future: Investors Care More About Sustainability Than Many Executives Believe.” An unfortunate note here: In the survey of more than 3,000 corporate executives and managers in 100+ countries, executives’ and managers’ perceptions are out of synch with the investing world realities, think the study authors. Co-author David Kiron (who is exec-editor of the MIT publication) thinks there is a communications gap at work here. “We found that investor relations professionals in companies are not really talking about value of sustainability to the bottom line, even though investors place real value on sustainability performance.” Data availability is an important driver of increased investor engagement with sustainability. “Today’s investors,” say the authors, “armed with richer data and more sophisticated analytics, can take a more nuanced and inclusive perspective.” And, more than 75% of investment community respondents to the survey feel that increased operational efficiency often accompanies sustainability progress. (Three-quarters of senior managers surveyed at investment firms said a company’s sustainability performance is material, and half said that they would not invest in a company with a poor sustainability track record.) Alas, on the corporate side, there’s the gap: only 60% of corporate senior executives agreed with their senior investment owners or prospective owners (the asset managers surveyed) about the importance of corporate sustainability; 90% of senior corporate executives see sustainability as “important,” but only 60% of companies have a sustainability strategy in place…and just 25% have a clear business case [for sustainability], says BCG senior partner Knut Haanaes. The MIT Sloan and BCG survey results offer corporate executives suggestions on how to meet the needs of the sustainable investor (a universe that is rapidly expanding). The study authors will be discussing their findings and suggestion on a webinar on May 26th. Study results are at: http://sloanreview.mit.edu/projects/investing-for-a-sustainable-future/ Highlights of all this are in our Top Story this week. Will We See Mandated Corporate Reporting on ESG / Sustainability Issues in the USA? The G&A Institute team places high value on “Big Sustainability Data,” and related analytics. We’re the data partners for the USA, UK and Ireland for the Global Reporting Initiative, and EVP Louis Coppola is in Amsterdam this week participating in the GRI global conference. He’s sharing results of our continuing, in-depth analysis of corporate sustainability reporting with our global peers. There is a tremendous amount of actionable information being made available by corporations for investor consideration. But as our analysis this showed, there is still a universe of 99 companies out of the S&P 500® universe (as example) that are not reporting on their sustainability journeys. As the MIT/BCG survey shows, there is still progress to be made in this area. There is a powerful investment case for corporate sustainability that corporate execs, managers and boards should be tuning in to. Read more on the Sustainability Update Blog
Sustainability in Focus An inside look at L’Oreal’s sustainability makeover The Business of Sustainability Greek debt analysis shows serious concerns over its sustainability Defining Sustainability For Your Business Coming to Terms With Sustainability KKR, Carlyle Group and private equity’s sustainability evolution GM’s Sustainability Report Outlines Gains in EVs, Carsharing, and Autonomous Vehicles World’s Largest Fashion Sustainability Summit to Drive Responsible Innovation Appreciating the Value of Sustainability in Health Ca 5 reasons supply chains are the new sustainability hotspot Paths to Corporate Sustainability
ESG Issues & Players Sticker shock of fixing Flint’s lead problem hints at colossal price tag for U.S.-wide remedy How climate change will impact the global middle class The median female CEO actually out-earned her male peer in 2015 Outlook for oil brightens as output disruptions erode surplus, IEA says What’s On the Panama Papers’ Database, What’s Not, and Why’
Asset Managers, US Pension Funds, Are State and Local Governments Really Underfunding Their Pensions? Yes, Really. Weak world economic growth lingers, with only modest improvement seen – UN 1MDB says to engage with bondholders following default
Watching the Watchers
KEY PARTNERS OVERVIEW / MISSION “Eurosif, European Social Investment Forum, was created in 2001 to serve as an umbrella association to cover socially responsible investment issues at the European level.” Forum members are pension funds, financial service providers, academic and research institutions, and NGOs. Members’ collective assets total more than 1 trillion Euros. Eurosif assists members through four types of activities: • European Union lobbying; BACKGROUND Eurosif works closely with the European Union’s Directorate General for Employment, Social Affairs & Equal Opportunities. The Directorate General’s task is “contributing to the development of a modern, innovative and sustainable European Social Model with more and better jobs in an inclusive society based on equal opportunities.” Weekly Highlights
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Investors Really Do Care About Sustainability – There’s a Gap Between Them and Corporate Executives
May 20, 2016
EUROSIF – European Social Investment Forum
