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.

Top Sustainable Business Strategies from 2012

In case you missed it, this blog on Sustainable Business Strategies for 2012 was published on Triple Pundit on January 4th.

Sustainable Future
As you go about developing or revising your sustainable business strategies, it is worth reviewing last year’s key developments in important areas of business strategy.

They will only grow in importance this year.

Rather than focus on particular stories ably summarized elsewhere, here are key strategic themes and the underlying research that you can use as practical guidance.

Corporate SOS: Business Value of Sustainability

In 2012, there was a sea change in the evidence for sustainability’s business value, especially when it comes to the market value of the company.

Key Sea Change Takeaway: Sustainable companies perform better than other companies over the long-term. This is true whether you measure stock market or traditional P&L performance.

Clearly, the business case for a particular sustainability project depends very much on the project and the company. In particular, it’s easier to quantify the business value for many efficiency or waste reduction projects.

Succeeding on Sustainability (SoS): Innovation is Key

Innovation is the key to business success in corporate sustainability programs.

A recent report on corporate sustainability practices worldwide found that the most common theme among successful sustainability programs is innovation. This has been central to InnovaStrat’s approach for several years.

The kind of sustainable innovation we are talking about is not just research and development. While this is significant, what matters even more is sustainability-driven innovation around business practices. The report concluded that this kind of innovation is most important.

Sustainability Champion: Finding the Business Value

Yesterday, I talked about the different reactions that business functions have to sustainability and the need to get these groups on the same page. There are two key elements in a shared viewpoint that lead to business value from sustainability.

First, the shared viewpoint needs to reinforce the core strategic strength, capability, or competence of the corporation. This involves a shift from the mindset that sustainability is just for society or the environment’s sake, to one that advances the core value proposition of the company. When you start looking at sustainability through this lens of core strengths, you begin to speak the language of business. You can then tailor this language to the dialect of each distinct business group in the company and inspire every employee in the company.