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Sustainability Difficult to Communicate to Investors (Hint: Focus on Results, Not Process)

gleadle, christopher, cmg consultancyCompanies are struggling to effectively communicate with investors on sustainability, according to the UN Global Compact – Accenture CEO Study on Sustainability in collaboration with the Principles for Responsible Investment. However, the detail contained in this report does show that 88% of investors surveyed do see sustainability as an opportunity for competitive advantage and 78% see it as a differentiator in determining industry leaders. Yet, a huge 91% of investors believe that sustainability should be better embedded into discussions between companies and investors, and 88% believe that they should pay greater attention to sustainability in company valuations.

Furthermore, there is clear water between the perception CEOs and their sustainability teams are creating, and the real-world understanding of investors: 57% of CEOs surveyed reported they are able to set out their strategy for seizing opportunities presented by sustainability, while just 9% of investors believe this to be the case.

Similarly, 38% of CEOs believe they are able to accurately quantify the business value of their sustainability initiatives, yet only a meager 7% of investors agree.

Moreover, this gap on perception and reality yawns ever wide on sustainability measurement and reporting as 74% of business leaders say their company measures both positive and negative impacts of their activities on sustainability outcomes, with only 17% of investors believing this to be true for the companies in which they invest.

Additionally, with 47% of CEOs reporting they regularly integrate sustainability issues into discussions with financial analysts, a lowly 27% of investors report this to be their experience.

Ultimately, it is important to remember, investors invest in results. Yet, for the mainstream of the sustainability movement, it is common for organizations, and many of their advisors, to focus on how to execute process rather than how to deliver results. This suggests that, to connect mainstream investors with the mainstream of the sustainability movement, teams right across organizations must increasingly learn how to see and understand the material connecting systems of sustainable viability to achieve superior outcomes.  And, I believe, education to improve the knowledge, skills and capabilities required, will drive palpable performance in sustainability leading to the veracity of reporting desired, which in turn, will result in, and from, an organization’s ability to increasingly capture, create and deliver more value and serve its stakeholders better.

Christopher Gleadle is author of Sustainable Growth Through Sustainable Business and founder & CEO of the sustainability performance agency  The CMG Consultancy.

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2 thoughts on “Sustainability Difficult to Communicate to Investors (Hint: Focus on Results, Not Process)

  1. I would agree that companies have a hard time talking about sustainability with investors. Partly this is due to the corporate sustainability program not being designed in the context of a shareholder value creation framework. These programs are usually designed within a sustainability framework. You need both.

  2. Communicating the value of sustainability is a lot like communicating the value of a new technology—you need to match the benefits to the audience’s wants and calibrate how deep you go into the process with the needs of the audience. The C-Suite, like the shareholder, wants a quick, bottom line benefit statement, while the person who’ll actually work with the tech wants this as well, but needs to know the “how-does-it-work” component.

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