It pays off to make sustainability an integral part of business

The days in which companies could polish their corporate image by claiming to be sustainable without actually being so, are long gone. The general public, shareholders and supervisory authorities have become more critical and that's a good thing. More importantly, sustainability - in addition to being a necessity to protect our planet - has developed into so much more than an image-booster. Actually, for many companies it has become a very important driver to strengthen their position in the marketplace. Facts don't lie, so let me give you some.

Evidence

There is plenty of evidence showing that companies who have a strong emphasis on sustainability are simply more successful. This evidence is - for example - provided by the CDP, which runs a global disclosure system that enables companies, cities, states and regions to measure and manage their environmental impact. One of their reports suggests that companies in the S&P 500 who are actively focusing on (reducing) the effects of climate-change are more profitable. They show a return on equity which is 18 percent higher than that of their peers and 67 percent higher than companies that do not act on climate change. The dividend yield for shareholders is 21 percent stronger than low ranking peers. In addition, these companies tend to be more stable, with 50 percent lower volatility earnings.

 

Managing ESG factors

Furthermore, research from Blackrock, one of the biggest and most prestigious investment funds in the world, shows that S&P 500 companies that focus on the effects of climate change are able to create more long term value for shareholders. Simply put, companies that effectively manage environmental, social and governance (ESG) factors that are material to their operations, are more likely to create value than those that do not. While the positive repercussions of ESG integration into business processes and the resulting financial benefits may not materialize immediately, actions and decisions made today provide the foundation for enhanced long term financial performance. Personally, I believe that making sustainability an integrated part of your business strategy is a no-brainer. Not only is it the best possible way to live up to your corporate social responsibility ambitions, but - as the facts above clearly show - it is also the way to create a more profitable and future-proof company.

 

Stefan Bernards

 



STEFAN BERNARDS

NEDAP

Stefan has over 6 years of experience in the lighting controls market as Export Manager and Product Manager. He has an irrepressible drive to move markets with technology that matters and reduce energy waste.

In his current role he continuously strives to create compelling product-market-fits that unleash the value of connected lighting. He has a master’s degree in International Business from RSM Erasmus University Rotterdam.

 

 


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