Jonathon Porritt: Investors still not convinced by sustainability reporting

Convincing investors about the value of corporate sustainability programmes remains an 'agonisingly slow process' for businesses, but there are signs that things are about to change.

Jonathon Porritt (centre-right) addressed M&S stakeholders at a Plan A update in London last week

Jonathon Porritt (centre-right) addressed M&S stakeholders at a Plan A update in London last week

That's the view of environmental campaigner and Forum for the Future founder Jonathon Porritt, who believes the green credentials of a business are still 'at the bottom of the agenda for many investors'.

Speaking at a recent CSR stakeholder update for Marks & Spencer (M&S), Porritt said: "It is remarkable how many completely unsighted, incredibly intelligent people there are in the investment community who still wouldn't' really understand the significance of the corporate sustainability agenda if you shoved it into them from every orifice.

"You wouldn't believe the number of chief finance officers and chief executive officers who will come out of an investor meeting saying 'it's still down at the bottom of the agenda and nobody really cares about this as yet.'"

"I think we're beginning to see pointers that this will change. They [investors] are getting better and beginning to understand the value of corporate sustainability plans of action, but it is still agonisingly slow."

Taking the lead

The M&S event, which took place in London last week, gave an update on the Plan A 2020 sustainability programme. The company's chief executive Marc Bolland admitted that the majority of investors have historically 'not been very interested in the agenda'. This is despite Plan A achieving net benefits of £145m in 2013 - up 7% on 2011, at a time of falling profits within the wider business.

"We have a few investors that are highly engaged on sustainability - so not to be misunderstood, this is not like nobody is interested," said Bolland. "However, the larger community of investors have not [seen this] as their priority over the last three or four years."

So where does the responsibility lie? Porritt - who is a chairman of M&S's external sustainable retail advisory board - claimed that M&S could be doing more to convince investors of the profitability of such large-scale sustainability initiatives.

"The role of M&S is really important in this area. It's one of the first companies to develop a very authoritative metric about the degree to which Plan A is helping to reduce cost and create top-line opportunity for the company.

"Every year, M&S creates a balance sheet about what Plan A is doing in terms of net contribution and profit. But that is slightly less emphasised in this Plan than it has been in the past and I'm extremely keen that M&S should maintain its leadership role here because that metric that it developed is better than any other that I know out there today.

"It's really important that sustainability picked up by other companies as part and parcel of bringing in investors - because they still need that extra leverage."

Success story

Responding to Porritt's comments, the Director of Plan A Mike Barry insisted the company is 'not going to walk away from the business case'.

"One of the reasons that they {investors] struggle with this is that I do believe businesses such as ours make a sufficiently compelling case to invest into us because we're going to prosper in the future because of our sustainability credentials.

"We do have to explain these sustainability success stories better to investors. We will keep on driving that agenda - the ball is in our court to explain what we're doing."

M&S launched Plan A in 2007 with 100 commitments to reduce the company's social and environmental footprint. In 2010, the plan was extended; to be integrated into all of M&S's processes and systems.

The 2014 Report focuses on four core values - inspiration, integrity, innovation and in-touch. M&S's director of Plan A Mike Barry said the updated sustainability programme, which now runs through to 2020, will be 'all about engagement'.

Luke Nicholls


| Engagement | investors | retail | Sustainability reporting | M&S


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