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What’s Your Sustainability Investor Story?

As investors increasingly see the link between sustainability and value creation, corporate leaders need to communicate the business cases underlying their sustainability initiatives.

Investors care more about sustainability than most executives believe, according to a joint BCG and MIT Sloan Management Review study. Sustainability investing is on the rise, as is the evidence that . Three factors are driving investor interest:

  1. Analytics showing how and when sustainability investments create shareholder value
  2. Research linking effective sustainability to strong financial performance
  3. Growing recognition among investors of the relationship between sustainability performance, value creation, and risk reduction

But it appears many executives are missing an opportunity to engage today’s more sustainability-savvy investors. While 75% of investors see sustainability performance as relevant to their investment decisions, only 60% of executives think investors care about sustainability. As a result, too few executives are able to articulate a story that links their sustainability strategy to business performance. A clear business case is at the heart of all successful sustainability strategies and investor stories—but too few companies have one.

Next Steps for Business Leaders

There are :

  1. Build awareness of sustainability challenges and programs.
  2. Identify and analyze material issues and create alignment within the organization to ensure an integrated response.
  3. Invest in tangible and measurable sustainability outcomes—not ratings lists.
  4. Formulate a strategy once tangible sustainability measures are established.
  5. Incorporate the sustainability strategy into the overall corporate strategy.
  6. Engage investors and stakeholders to discuss the company’s sustainability strategy and progress.

The Business Case for Sustainability

What is the relationship between sustainability and competitive advantage? BCG’s Holger Rubel discusses the correlation—and how to create a sustainability strategy.

Sustainability
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