Blog 07.02.17

A company's guide to sustainable investing


In Part 1 of this blog series – Sustainable investing is on the up and up – we discussed how sustainable investing is going mainstream. In November 2016, US SIF reported that one-fifth of all professionally managed assets consider environmental, social, and governance (ESG) factors.

The trend is being driven by a new generation of investors who realize that sustainability has significant benefits for business performance.

Tapping into All that Cash

So how can companies make the most of this growing pool of investors looking at ESG? Put simply, give them what they want, and make it easy for them to get it.

First, measure what matters. Identify the most material issues and make sure you’re measuring progress consistently each year. If you haven’t conducted a materiality analysis, consider it. We don’t recommend this as a check-the-box exercise for your next GRI report. Rather, use it to drill down into what’s driving business performance, and consider how sustainability impacts those objectives in the short and long term.

Second, talk about it – but don’t ramble. For too long, sustainability reporting took on a more is better approach. But if you’re targeting investors, they want decision useful information that is comparable year over year, and between your company and your peers.

Reporting frameworks like the Sustainability Accounting Standards Board (SASB) aim to do just that. While companies still hesitate to integrate SASB metrics into their 10-Ks, they can use SASB as a useful guide for disclosing investor-relevant data.

Also consider a more targeted approach for your investors. Don’t make them sift through case studies and videos looking for your greenhouse gas emissions. Give them a data dashboard or a simple download that puts all the decision useful data in one place. Motorola Solutions did just that with their 2015 Corporate Responsibility Report and Brown-Forman’s data scorecard gives investors what they want as a complement to a more traditional report and website for a broader audience.

Hop on the Train or Be Left in the Dust

This should be encouraging. Investors are taking sustainability seriously. It’s time for business to hop on board. Mainstream companies can tap into the growing pool of ESG investors by sharing decision useful data to demonstrate how their commitments to sustainability are positioning them for growth and resilience in a changing world.

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