The Sustainability 2.0 column will help you by sharing resources, discussing trends and bringing you the latest and greatest on how you can be part of the solution. We will discuss energy, out of the box water conservation, socially responsible investing, eco-tourism, healthy eating, and collaborative consumption.
Photo: Tajana Mesic within retirement plans, and hundreds of asset managers now promote their ability to manage responsibly invested portfolios. Socially responsible investors share a vision of healthy ecosystems and healthy communities. They recognize that how they direct their investment capital can have a signiﬁcant impact on their communities domestically and internationally — positive or negative. Investing in such cases becomes about integrating values with proﬁtable investment decision-making. Sustainable and responsible investing incorporates environmental, social, and governance (ESG) criteria into the investment process. Using these criteria, investors identify well managed companies with the strongest demonstrated performance in areas of environmental sustainability, social responsibility, and corporate governance. In this system, companies that practice corporate social responsibility operate at a signiﬁcant competitive advantage, which is a driver of revenue, of stability, and of shareholder value. The sustainable investment industry has led business across three developmental phases in the past thirty years: During the ﬁrst phase, investors were primarily following the “Do No Harm” approach of avoiding companies in their portfolio that were environmentally negligent, or that produced harmful products like tobacco or alcohol. During the subsequent “Doing Well by Doing Good” phase, many companies worked to reduce costs and enhance proﬁts through pollution prevention, waste minimization, energy efficiency, and other relatively simple business strategies. We are currently in the third phase, “Sustainability”. In this phase, progressive companies integrate sustainability into their operations and advocate transparency. Sustainability practices drive top line growth by encouraging innovation, increasing sales, improving customer retention, attracting talent, and offering competitive advantage. Socially responsible investors seek out companies of the future — companies working in more sustainable industries, whose executive teams have demonstrated a commitment to accountability and ethical practices. Those companies have a reduced risk proﬁle and present a safer and more proﬁtable investment to the prospective investor. Recent studies have indicated that voluntary disclosure of greenhouse gas emis-
sions [GHG] result in a higher share price for the enterprise. The concept is fairly simple: If an enterprise discloses its environmental impact, the investment community can “price” the risk of potential problems. By being able to price the risk, the investment community ultimately rewards the disclosure, as it relates to their competition. On the other hand, if an enterprise does not disclose its environmental impact, the investment community prices the enterprise as a greater investment risk. The bottom line: investors will price according to the amount of disclosure. If they don’t know what’s happening, the risk is greater. Consequently, those that voluntarily disclose their activities (related to environmental activities in this case) enjoy a greater share price. So don’t be afraid to engage in the practice of corporate social responsibility, business for social responsibility, sustainability, sustainable business, double bottom line, triple bottom line, compassionate capitalism, green business, ethical business. Socially responsible investors focus on investments that are both capital growth intense and social impact sensitive. If you are an individual investor, you would do well to seek out socially responsible, higher yield investments. If you are interested in talking with a knowledgeable, experienced investment advisor who can help you integrate your personal values and priorities for the common good into your investment portfolio, visit http://www.bcorporation.net/community/ search” http://www.bcorporation.net/community/search and search for a B Corporation Certiﬁed provider in your area. B Corporation sets a standard for privately held companies — B Corporation certiﬁcation. A third-party certiﬁer, B Lab is a national certifying organization for companies in the United States and beyond. Their seal of approval veriﬁes corporate social responsibility and transparency. There are 574 certiﬁed B Corporations in America, and 15 of those are in Texas. If you are a business owner, seek to safe-proof your business by becoming more sustainable in your operations. So regardless of whether a top-down or bottom-up investment philosophy best describes your investment style, add a little social responsibility to your recipe for success. Your ROI, your kids, and the planet will thank you.
Tajana Mesic is the president and founder of GGG Sustainability Solutions, a speaker and a philanthropist. GGG is a full-service sustainability and resource efficiency consulting ﬁrm operating in Houston and Dallas, providing clients with professional services and guidance on integrating sustainability strategy into operations in a ﬁnancially viable way. GGG is a certiﬁed B Corporation and deeply involved in the Dall0061s and Houston international community.
Published on Oct 9, 2012