Two recent studies have given us a clearer picture about what sustainability actually means to executives and investors.
The first one comes from Harvard Business School, and it says that investors are showing more interest in non-financial information about companies. The authors know this by looking at what environmental, social, and governance (ESG) terms investors are searching for on the Bloomberg database.
For example, there were 2,395,230 hits for “ESG Disclosure Score” versus 606,998 hits for “UN Global Compact Signatory.” Or 109,883 hits for “Total CO2 Emissions” versus 78,499 hits for “Fair Remuneration Policy.”
The numbers suggest that investors are very interested in the quality of how companies are disclosing this information. The authors even suggest that investors might be “using ESG disclosure quality as a proxy for management quality.”
The other bit of insight comes from the McKinsey Quarterly. More execs are seeing short- and long-term added value from sustainability, according to a survey published in October.
The bad news is that there are still barriers stopping companies from “capturing potential value” from sustainability initiatives. According to the nearly 300 “sustainability leaders” surveyed, these were the two biggest barriers:
- “Pressure of short-term earnings performance is at odds with longer-term nature of sustainability” (32% agree with this)
- “We are capturing all the value we can.” (30% agree with this)
The first one I sorta get, but the second one….really? Thirty percent of sustainability leaders think it’s time to crack out the “Mission Accomplished” banners?
I actually can’t think of a single organization that couldn’t be getting more value from their sustainability initiatives – or at least isn’t aspiring to.
The reports are here:
- Harvard Business School: “Market Interest in Nonfinancial Information” (October 2011)
- McKinsey Quarterly: “The business of sustainability: McKinsey Global Survey results” (October 2011)
