Today, being able to demonstrate strong environmental performance and a sustainable track record are essential to leveraging investment.
A new report by MIT Sloan Management Review and BCG Study confirms the news.
The survey of more than 3,000 executives and managers, from more than 100 countries showed that managers’ and investors’ perceptions of sustainability are out of sync.
75% of senior executives in investment firms agree that a company’s sustainability performance is materially important to their investment decisions, it says.
Nearly half would not invest in a company with a poor sustainability track record. However, only 60% of managers in publicly traded companies believe that good sustainability practices have an impact on investment decisions.
“There’s a communications gap,”says co-author David Kiron, executive editor of MIT SMR. “We found that investor relations professionals in companies are not really talking to investors about the value of sustainability to the bottom line, even though investors place real value on sustainability performance.”
Bridging this gap will be crucial, both to deliver increased investment and more sustainable, profitable UK businesses.
The next steps to investment confidence and a clear business case
Today’s investors are increasingly armed with richer data and more sophisticated analytics, says the report.
“Unfortunately, too few companies are prepared to benefit from more sustainability-savvy investors,” says Knut Haanæs, a BCG senior partner and founding leader of the firm’s sustainability practice.
“This year’s research showed that while 90% of executives see sustainability as important, only 60% of companies have a sustainability strategy in place, and just 25% have generated a clear business case. And a clear business case is at the core of a company’s sustainability story for investors.”
The report suggests a number of key steps for business leaders to meet the needs of the sustainability investor:
- Build awareness of sustainability challenges and programs
- Invest in and focus on tangible and measurable sustainability outcomes
- Formulate a strategy once tangible sustainability measures have been established.
- Incorporate the sustainability strategy into the overall corporate strategy
To achieve all these overarching aims, energy monitoring and targeting is essential; it’s a data driven approach that gives investors the tangible evidence you are committed to tracking environmental performance and energy efficiency.
“At BG Energy Solutions, we are committed to providing transparent data to prove a firm’s energy metric and deliver tomorrow’s investment,” says Gareth Barber, Managing Director, BG Energy Solutions.
“Increasingly stringent legislation on energy and soaring energy prices mean energy monitoring and targeting is now a critical part of every energy manager’s job role,” he continues. “However, you can’t manage what you can’t measure.”