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98% of Sustainability Initiatives Fail. What the …?!

Failing grades without compelling business cases

Last month, Bain & Company published a rather shocking report, "Achieving Breakthrough Results in Sustainability." The title is encouraging; its findings are not. Based on a survey of over 300 large companies engaged in sustainability efforts, it found that 98% of sustainability initiatives fail. What the ...?! Read More

Five ESG Standards Will Awaken Capital Markets

harmony on the planet Last week’s blog outlines my four strategies to help capital markets embed environmental, social, and governance (ESG) strategies into the mindset of executives. I briefly referenced five concurrent ESG standards initiatives that are in play in capital markets to make this happen. They will lead to an ESG mindset in lenders and investors. Following the axiom that “what interests capital markets fascinates executives,” this will precipitate an ESG mindset in company executives. The five ESG standards efforts are shown in the adjacent figure, beside their corresponding element of the capital market information ecosystem. I describe three of them in my April 15 article for Network for Business Sustainability (NBS) entitled “2015 Will Bring ‘Sweeping Changes’ to Capital Markets.”  They are:
  • A New Ratings Standard: The Global Initiative for Sustainability Ratings (GISR)
  • A New Voluntary Reporting Framework: The International Integrated Reporting Council (IIRC)
  • New Regulatory Reporting Guidance: The Sustainability Accounting Standards Board (SASB)
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Four Strategies to Use Capital Markets as a Force for Good

accelerating corporate sustainability adoption practices We need sustainable businesses if we are to have a sustainable world. That means we need strategies to use capital markets as a force for good and we must embed environmental, social, and governance (ESG) thinking in executive’s mindsets. For the last 12 years, my strategy has been to appeal to executive’s profit motive. I thought if I could help them see how more profitable they could be if they embraced sustainability strategies, they would stampede to make the necessary transformation. That’s what my four books, two DVDs, worksheets, dashboard, and hundreds of talks have been all about. How’s it going so far? Okay, but way too slow. We need to add a push strategy to our pull strategy. We need to wake executives up with the down-side risk of not doing more, to compliment the up-side opportunity of higher revenue, lower expenses, and higher employee productivity and retention. The business case simulator helps companies quantify 14 risks to profit from inaction, but I should have highlighted the mother of all risks: more difficult access to capital when lenders and investors prioritize ESG factors in their company assessments. Capital markets are gate-keepers to corporate interest in ESG. Here are four strategies to make them a force for transformational change. Read More

7 Risks to Revenue without Sustainability Strategies

“Thanks, but no thanks. Maybe later.”Those words are like the kiss of death to a sustainability champion. Usually the rebuff follows a presentation to a busy executive who is surprisingly unexcited about the financial opportunities the company can capture if it embraces sustainability strategies. Now what? Read More

New Revenue from New Products and New Markets

In my last blog, we outlined how companies can gain more Business-to-consumer (B2C) and business-to-business (B2B) revenue from a more responsible company brand. This week we will look at a second way that sustainability strategies bolster revenue: the green attributes of the company’s products and services become differentiators. The payoff for differentiation is increased market share as customers who seek “green” solutions are attracted to the company’s products and services over its competitors’. That is, the sustainability attributes of a company’s products are differentiators to B2C and B2B customers who seek “green” solutions. Read More

More B2C and B2B Revenue From a More Sustainable Brand

People buy from companies they trust. More and more, customers prefer to do business with companies that are doing good things and are responsible. The responsible image of the company builds loyalty with customers who identify with the values of the company – their loyalty is more to the company than to its products. Even when buying green products, consumers may gravitate more towards buying from companies that best walk-the-talk on sustainability at a corporate level. Read More

Aligning ESG Benefits with the Standard 2-Part Business Case

There are only two reasons a company changes: to avoid risks and / or to capture opportunities. They go for the upside, and / or run from the downside. They are attracted to the carrot, and / or want to duck the stick; the yin and / or the yang. Trying to convince a company to fully embed sustainability into its strategies and operations requires a very compelling business case. The standard business case is made up of these same two parts, shown in the figure below. Read More

Aligning ESG Benefits with the Income Statement

click on image to enlarge

We need to make it easy for CEOs, CFOs, and others in the C-suite to see how embedding sustainability strategies into the company’s strategies and operations will contribute to the firm’s success. That is, we need to connect the dots between typical financial statements and the benefits that can be realized from smart environmental, social, and governance (ESG) approaches and programs. Aligning ESG benefits with income statement elements helps executives see the relevance of sustainability initiatives to their current financial priorities. Read More

Aligning ESG Benefits with Executives’ Top 10 Priorities

What is the secret of selling executives on using sustainability strategies? Show how the benefits of those strategies help them achieve their existing priorities on which they are already being measured. Executives are juggling way too many key focus areas to welcome adding another one like “sustainability” to the batch. That means sustainability champions need to align the set of benefits that are yielded by smart environmental, social, and governance (ESG) / sustainability strategies with executives’ top priorities. Read More

5 Reasons Why a GPI Should Replace the GDP

Economists deny that Gross Domestic Product (GDP) was ever intended as a metric of overall country progress or well-being. However, that’s how it is being used. Leaders express alarm if the GDP—the value of all goods and services produced within a nation in a given year—falls. Countries are ranked by GPD or GDP per citizen, implying that countries with higher rankings are doing better overall than countries with lower rankings. What nonsense. We need a better metric for improved quality of life and progress. We need a Genuine Progress Indicator (GPI) that accounts for not only monetized economic wealth but, more importantly, includes vital environmental and social factors. Here are five reasons why it’s time we replaced the GDP with a GPI. Read More