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.

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5 Reasons I Low-Ball Employee Productivity in the Business Case for Sustainability

As explained in The New Sustainability Advantage, sustainability strategies and programs result in higher levels of employee engagement. Engaged employees are more productive. They want their company to succeed so that it can continue to add value to the community and ecosystems which the employees care about. Engaged employees are the secret sauce in the business case for sustainability. When employees are engaged, magic happens.
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Sustainability Business Case # 3: Share Price

In previous posts, I identified three ways to frame the business case for sustainability: improved profit; high return on investment (ROI); and higher share price/market valuation. I’ve already illustrated that the profit-based business case and the ROI-based business cases are very strong.

Now let’s discuss that final rung: whether a case can be made that sustainability initiatives will have a positive effect on market value/share price. Read more

Sustainability Business Case #2: ROI

In my last post, I identified three ways to frame the business case for sustainability, including through improved profit. The profit-based business case is robust and smart sustainability initiatives can improve profit by at least 51 percent to 81 percent within three to five years while avoiding a potential 16 percent to 36 percent erosion of profits if they did nothing.

Now let’s consider the ROI perspective. Read more

Sustainability Business Case #1: More Profit

How would we know a business case for sustainability if we saw one?

The strength of any business case depends on agreement on what we mean by “business case”—how we’d know one if we saw one.

These headlines have caught my eye in the last few months [and these are just five of many more with similar wording]: Read more

New Sustainability Advantage DVD Increases my Ripple Effect

bigstock--D-White-People-Businessman-I-48691073

How many talks can I give in a year without killing myself?I asked myself that question a few years ago on a strategic planning retreat – being a sole proprietor, I can hold those in the shower. I had settled into a pattern of doing 80-100 talks a year on the compelling business case for sustainability-related strategies, yet I was concerned that the momentum on the sustainability journey in the business community was not building fast enough.

Wouldn’t it be great if I could spread the word faster and wider by doing 1,000, 10,000, 100,000, or even 1,000,000 talks a year all over the world without increasing my carbon footprint … even if I got hit by a truck on day one? Read more

Four New Resources for Sustainability Champions

I love it when a plan comes together.

—Colonel John “Hannibal” Smith, A-Team leader—

March was a great month. I’ve been counting backward from that date for two years. I wanted to co-release four new interrelated business case resources for sustainability champions. It worked. Read more

Seven Business Case Benefits of a Triple Bottom Line – Tenth Anniversary Edition

The New Sustainability Advantage

Pre-Publication Discount Valid Until March 1st 2012

The New Sustainability Advantage has a recalibrated, and more compelling business case for sustainability strategies than described in its 2002 version. Based on recent case studies, it shows that if a typical company were to use best-practice sustainability approaches already being used by real companies, it could improve its profit by at least 51% to 81% within three to five years, while avoiding a potential 16% to 36% erosion of profits if it does nothing.

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The fully revised business case is organized around seven easy-to-grasp bottom-line benefits that align with current evidence about the most significant sustainability-related contributors to profit. Read more

End of Bob Willard’s Blog – Exciting New Projects On the Horizon

 

After much reflection, this will be my last blog post. I would like to take this opportunity to thank everyone for following my posts and for their insightful comments. I am now refocusing my efforts on enhancing my resources for sustainability champions.

As context, as a certified B Corp, my vision is a sustainable world in which individuals, communities, and businesses thrive within nature’s limits. My two-fold mission is to inspire business leaders to integrate sustainability strategies into company strategies, and to provide useful resources for an army of sustainability champions so that they have the competence and confidence to accelerate the transformation toward a sustainable global society. I want to spend more effort on that last part. Read more