The Disconnect Continues with Sustainability and Investing

[In a recent post Derek Wong of Carbon49 illustrated how sustainability leaders outperform the market (Canadian CSR Leaders Outperform TSX) yet a glaring disconnect continues when it comes to assessing a companies risks and opportunities as it relates to it’s CSR strategy.  Why is it so hard for the investment community to put meaningful metrics behind CSR?]

Bradley Silverman

Companies 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% 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 companies are creating, and the real world understanding of investors, since 57% of CEOs surveyed reported they are able to set out their strategy for seizing opportunities presented by sustainability; yet, 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 sustainability activities, 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, to connect mainstream investors with the mainstream of the sustainability movement, teams, right across organisations, 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. In turn, this will result in, and from, an organisations ability to increasingly capture, create and deliver more value and serve its customers, indeed, all of its stakeholders, better.

This article was originally published in CSRwire
Christopher Gleadle is a Coach, Educator and Advisor in Sustainable Viability.  Christopher shows businesses how to capture create and deliver more value and serve customers better using the power of robust sustainable practices.