Sustainable Business Strategies: Investors

Investors are one of the biggest, “below the radar”, drivers of sustainable business for the future, and are making slow and steady progress in sustainable and responsible investments.

The lessons for corporate sustainability champions are:

  1. While it may not seem that investors care about sustainability, their interest is steadily growing and will become very visible in a few years.
  2. The cost savings for companies from sustainability and rising expectations of limited partners are driving the interest in these investments.
  3. This trend will accelerate when the metrics for monitoring investments improve, which seems to be taking place now.  Nearly half of all shareholder resolutions typically have to do with sustainability.

Sustainable Business Strategies: Risk Management

2012 was the year in which risk management strategies to cope with sustainability mega forces became more sophisticated.

risk management

The lessons for corporate sustainability champions are:

  • Risk management for climate change and other environmental threats must become part of enterprise risk management.  If it isn’t, then you’re really in the minority.
    You need to make it a priority within your company.
  • Focus on business resilience, not just to extreme weather events that disrupt supply chains and operations, but also to the threat of resource constraints.

Sustainable Business Strategies: Natural Capital

Natural Capital2012 was the year in which natural capital (also called biodiversity and ecosystems services) began to get on business’ radar. This is a theme that has real staying power.  

Advice for the Corporate Sustainability Champion:

  •  Stay up-to-date with this important, rapidly developing area of sustainability. It appeals to business executives because it is easier to grasp conceptually.
  • Show why natural capital matters to your company. The way to do so is through a pilot evaluation of its materiality to business.
  • Join the coalitions that are beginning to form in this area, such as the TEEB for Business Coalition and the EP&L Consortium.

Sustainable Business Strategies: Energy Strategies

InnovationSustainable energy strategies need to recognize three key themes: the resurgence of natural gas in the mix of fossil-fuel energies, the mixed picture with regard to clean energy technologies, and the slowing down of energy efficiency gains.

Advice for the Corporate Sustainability Champion:

1. Keep a close eye on the rapidly changing fossil-fuel energy mix. The glut in natural gas availability is a mixed blessing since it could lead to complacency.

2. For the long-term, renewable energy sources are still the surer bet in terms of predictability and price, despite their slowing growth in the last year

Sustainable Business Strategies: Food and Water

Food and water, along with energy, comprise a resource nexus that will impact sustainable business strategies for all firms, given their central role in the economy.

Feeding the future world when water is constrained will be a daunting challenge . Food production will need to increase by 70% by 2050 in order to feed the projected global population of 9 billion.  Extreme weather will exacerbate the production of food and increase food prices disproportionately affecting developing countries where 70% of the household budget goes to food (the US figure is 13%).  Rising food prices have pushed 44 million people into poverty globally just in the past two years.  One tragedy is that smallholder farmers comprise 50% of the undernourished, even as they grow food themselves. Unfortunately, the prices of staple foods could double by 2030.

Business Strategies: Sustainability Megatrends

As sustainable business strategies get revised for 2013, it is time to take an informed look at the sustainability megatrends highlighted in 2012.

The clear message of 2012 is that sustainability mega forces are accelerating in strength, which makes it a corporate strategy challenge and opportunity. One of the best reports on these megatrends describes a world in 2030 that is radically different from today: greater individual empowerment, shift in power to a multipolar world, much greater urbanization and migrations, and a demand-supply gap for food, water and energy that creates a dangerous nexus.