When to take investor demands for sustainability seriously (and when to ignore them) _ greentech media cost of gasoline by year

As investors continue to push for metrics to show progress on sustainability, it can be tempting for businesses to jump quickly to meet their demands. Triple a gas cost calculator Not surprisingly, though, a recent study found that businesses that are ill equipped to make the right sustainability choices often see a decrease in market value. Conducted by researchers from Harvard Business School, the study involved 2,665 shareholder proposals between 1997 and 2012, and relied on guidelines by the Sustainability Accounting Standards Board (SASB) to determine whether sustainability efforts were financially material.

Gas heating cost per month Materiality, particularly related to sustainability, isn’t always a clear black-and-white issue, and it can be drastically different for businesses in different industries.


According to SASB’s materiality map, different aspects of sustainability, such as energy management, water management, air quality, greenhouse gas emissions, or biodiversity impact, can be more commonly material in some industries versus others. Gas chromatography mass spectrometry For example, greenhouse gas emissions are likely to be material for more than 50 percent of chemical manufacturers, but unlikely to be material in the aerospace and defense sector.

The study concluded that overall, businesses were quick to react to any suggestion to improve on a broad range of environmental, social and governance (ESG) issues, such as diversity, energy efficiency, water consumption, and product safety — regardless of whether the proposal was even voted on and passed. The simple act of investors shining a light on an issue tended to capture management’s attention and lead to improvements. Average cost of gas 2014 But here’s the important piece for management to understand — improvement on an ESG issue does not necessarily mean improvement in financial value for the company.

This is where materiality comes into play. Estimate fuel cost for road trip When investors filed proposals on issues that were material to the companies involved, those companies largely saw their market valuation increase, “even several years after the proposal,” said George Serafeim, a professor at Harvard Business School and one of the study’s co-authors, in a recent article.

The linkage between high-performing companies and strong sustainability policies is gaining steam. Calculate fuel cost for trip europe According to the Principles for Responsible Investment Initiative, the number of funds that focus on ESG metrics grew from $4 trillion in 2006 to $59 trillion in April 2015. How to estimate gas cost More and more investors are using sustainability metrics as a meaningful factor in their evaluations and pushing companies to do more. Car fuel cost comparison calculator But businesses need to be smart, because according to the researchers in the HBS study, 58 percent of all the proposals reviewed involved immaterial issues — and the majority of those corresponded to a decrease in companies’ market value.

The study unsurprisingly concluded that “management struggled to distinguish between material and immaterial requests. ” Serafeim speculates that “perhaps management responds to immaterial investor requests because they mistakenly believe that doing so will increase the company’s value.

” For an example of what great looks like when it comes to evaluating materiality, look no further than Unilever, a company that is often lauded for both its sustainability practices and financial performance. Figuring gas cost for trip Unilever not only takes a close look at what ESG issues are material and are not material, in the spirit of full transparency and open communication with stakeholders, it also publishes its materiality map on its website.

In 2015, Unilever evaluated 191 issues, grouped into 38 key topics. Average annual fuel cost calculator At the end of the process, the team identified 15 material issues (water, deforestation and sustainable agriculture topped the list), developed action plans, and updated its “sustainable living plan.

” Unilever’s approach is a textbook example of emerging best practices that focus on data-driven decision-making, communication and transparency. Companies that want to take a page from Unilever’s playbook have an increasing number of resources to draw from. Cost of gas in denmark Organizations like SASB offer a number of tools, like a materiality map, and online learning opportunities. Importantly, these resources are also being actively pushed to the investment community.

Cost of gastric band surgery in india Companies that want to stay ahead of the curve are best served by understanding what is — and just as importantly, what isn’t — material to their businesses health. Site: http://www.greentechmedia.com/articles/read/when-to-take-investors-demands-for-sustainability-seriously