BSR Insight | Advocating a Shift to Sustainable Capitalism
In the face of climate change, water scarcity, poverty, and other challenges, it’s time for a shift to sustainable capitalism, according to a white paper published last month by Generation Investment Management, a firm cofounded by former U.S. Vice President Al Gore. The authors of the paper suggest that the new paradigm maximize long-term value creation by reforming markets to address real needs and consider all costs. They recommend five key actions for businesses to spur adoption and accelerate this framework: * Identify and incorporate risks from stranded assets. * Mandate integrated reporting. * Move away from issuing quarterly earnings guidance. * Align compensation with long-term sustainability performance. * Encourage long-term investing with loyalty-driven securities. The paper also identified additional areas that merit ongoing attention, including reinforcing sustainability as a fiduciary issue, creating advisory services for sustainable asset management, and integrating sustainability into business education at all levels.
Topics
Governance & Accountability, Investor Perspective, Reporting & Communications, Strategy & Integration
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