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Why sustainability attracts investors

As the Volkswagen emissions scandal highlights, consumers – and regulators – are serious about sustainability. Whether ecologic, economic, cultural or political – sustainability is rising to the forefront of organisation’s agendas. Part of this adoption is certainly motivated by regulatory requirements and the heavy fines that can be levied on organisations that don’t comply (Volkswagen, ahem!) But there’s an increasing awareness that sustainable behaviour offers other benefits.

A growing market appetite

As issues like global warming, fair labour, environmental protection and cultural preservation feature more heavily in the media, consumers and investors alike are seeking out organisations that endorse sustainability. And this growing appetite is increasingly apparent in the financial market.

In addition to SRI indices, we’ve also seen the creation of the Principles of Responsible Investment (PRI) Initiative. With signatories possessing combined assets of more than $59 trillion, the PRI is a clear sign of the financial market’s growing commitment to sustainability.

In the USA last year, one out of every six dollars of assets under professional management was assigned to some type of sustainable investment. Publicly traded companies are increasingly striving to be selected for these funds – and highlighting their inclusion to stakeholders. Unsurprisingly, in response to this changing landscape, a growing proportion of investment firms are including environmental, social and governance (ESG) criteria into their portfolio selection and investment analysis. Which means companies that fulfil ESG criteria have an early opportunity to get ahead in a burgeoning market.

A wise move

The motivation for companies to become more sustainable isn’t limited to attracting investment, however. There are numerous other benefits to reap: efficient use of energy and resources can reduce costs; effective management of employees can improve productivity; and the positive PR to be gained from sustainable behaviour can boost brand reputation exponentially. While sustainability continues to gain import, organisations that get on board earlier rather than later are likely to gain the most advantage.

We’ve produced annual and sustainability reports for organisations ranging from the telecoms to extractive and energy sectors – and many others in between. Get in touch with us to discuss how we can help with your reporting needs.

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