Companies expend much effort on reporting operational metrics for sustainability, but that tells investors, regulators and ratings organizations little about the financial benefit (or ROI) of associated efforts and expense.
According to a new study of over 110 U.S. based publicly traded companies:
While sustainability/climate matters are almost universal as a material Business Risk in SEC 10-Ks/Annual reports, few companies balance that with discussions or data about upsides, value or ROI.
These firms have no control over their story - third parties apply judgement with their own assumptions and interpretations about the value of sustainability.
In addition, this lack of formal financial value disclosure supports the perception that sustainability is simply a cost and business risk driving negative business conditions.
We believe that sustainability is a business problem needing business solutions. Executives, boards and external stakeholders - especially investors - have grown cynical about soft-dollar values like intangibles and reputation. Leaning heavily on those concepts helps fuel attacks on corporate sustainability.
There is opportunity in the confluence of unprecedented operational sustainability data availability and today's political, regulatory and cultural zeitgeist.
For sustainability to survive current trends in US policies, de-regulatory agenda and enforcement pullbacks, we must adjust our priorities. Failing to do is an existential threat to practitioners, staff, leaders and corporate functions.
Certainly, not every sustainability matter has a direct ROI: there are intangible benefits of sustainability programs that can’t be quantified, but are nonetheless worthwhile. Investments in local communities and education, employee growth opportunities, charitable donations and philanthropy are some examples.
However, where opportunities exist to demonstrate financial value, it is critical to do so.
Focusing on the ROI/business value is vital to fighting lawsuits, shareholder activism, regulatory investigations, and claims of breaching fiduciary duties.
It's never been more important - or easier - to demonstrate the real financial value/ROI of corporate sustainability programs.
Let us show you.
Our goal is to assist you in determining and formally reporting the hard-dollar financial value of sustainability initiatives and metrics, as well as the ROI on your corporate sustainability programs.
Reach out with questions or schedule a meeting to explore how to uncover and disclose the real dollar value of your corporate sustainability programs and initiatives.
Lawrence Heim, Founder lheim@sustainabilityvaluereporting.com (678) 200-3424
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