SUSTAINABILITY MATTERS
A HOLISTIC APPROACH TO SUSTAINABILITY:
Why ESG Will Factor into Your Success By Paul “Max” Le Pera and Jessica McNaughton In the last issue, we defined and
can affect the long-term viability of a
CSR, although quantifiable in number
detailed a much broader framework
company. These nonfinancial conditions
and levels of achievement, typically
of what sustainability should mean
are coming under increased scrutiny.
included qualitative measures without a
to a business and how all the tendrils
Today, there are a growing number
concrete set of metrics to gauge efficacy.
we outlined could work together in a
of investors who are actively seeking
During the first decade, interpretations
formidable synergy to increase the value
alignment with their core values to those
of what CSR meant and how it was
and sustainability of a company. We’ve
of an investment target. Core values are
applied and accounted for significantly
elucidated this paradigm, so business
more expressed by leadership, actions,
varied, yet the intentions were valid.
owners and stakeholders can create equity
systems, controls and culture versus any
Practices like volunteering, broad efforts
through stewardship, align personal and
quantitative figure. It is no wonder, then,
to minimize carbon emissions, use of
core values with their business operation,
that the rapidly emerging investing styles
renewable energy, and a focus on profit,
mitigate risks, increase accountability,
of Environment, Social and Governance
people, planet — or triple bottom line
and ultimately anneal their business from
(ESG), Socially Responsible Investing
— were included to varying degrees.
within. To expand upon this, we venture to
(SRI) and Impact Investing (II) have
The movement gained such momentum
assimilate our framework for sustainability
garnered much of the limelight in capital
that even International Standards
with the profound momentum
Organization (ISO) scripted and issued
surrounding trending criteria used to
markets now. Arguably, the genesis of this more
evaluate investments by capital markets.
progressive consciousness began better
Essentially, ISO 26000 clarifies social
than two decades ago when the terms
responsibility and helps organizations
Entity valuation criteria are rapidly transcending what is portrayed by a
Safety, Health and Environment (SHE)
company’s P&L. Despite a rigid set of
and Corporate Social Responsibility
accounting standards used to report a
(CSR) became commonplace among
business’s financial position, there are a
larger firms looking to differentiate
plethora of nonfinancial conditions neither
themselves by demonstrating a
reflected nor reported by a company that
commitment to people and the planet.
ISO 26000 entitled “Social Responsibility.”
translate CSR principles into practical actions. CSR and SHE have evolved to focus on including the qualitative measures of ESG, SRI and II. ESG evaluates a company’s position on environmental stewardship, social stewardship, corporate culture
Today, there are a growing number of investors who are actively seeking
and surrounding communities, and
alignment with their core values to those of an investment target. Core
governance, including leadership, human
values are more expressed by leadership, actions, systems, controls and
resources and ethical practices. SRI deals
culture versus any quantitative figure.
primarily with choosing investments
20 • Vol. 15 / Issue 2 • International Surface Fabricators Association
