Author: The Economist
Source: The Economist Intelligence Unit
Global companies that have delivered strong share price growth over the past three years are more proactive on corporate sustainability issues than those that have seen their share price stagnate or decline, according to a major new research report from the Economist Intelligence Unit.
The report, which is sponsored by A.T. Kearney, Bank of America, ExxonMobil, Jones Lang LaSalle, Orange, PricewaterhouseCoopers, SAP and SunGard, illustrates the growing importance of corporate sustainability in enabling companies to compete and to attract customers. The research is based on a global survey of 1,254 senior business executives, including more than 300 CEOs.
The survey does not claim that the adoption of sustainable practices causes companies’ share prices to rise. It could be that companies with a strong financial performance simply have more resources to devote to sustainability. What the findings do show, however, is that it is possible to take a proactive position on social and environmental issues while still delivering robust financial growth. Indeed, companies in the survey that saw their share price rise by at least 50% in the last three years (share price climbers) place a greater importance on social and environmental goals than companies with share prices that have declined by more than 10% (share price losers). Social and environmental goals include improving environmental and human rights in supply chains, where 40% of share price climbers rank this as an important priority versus 18% of share price losers; reducing greenhouse gases (38% to 24%); and developing products which address social and environmental problems (49% to 35%). Share price climbers also put a greater emphasis on social and environmental considerations at board level.