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In This Issue
Editor's Note
Long-Term Value and Sustainability
Lehman Brothers' declaration of bankruptcy one year ago today was the de facto beginning of the global financial crisis. With today's hindsight, it's obvious that a focus on short-term returns played a significant role in creating the financial markets’ instability. It's no coincidence that last week, almost exactly a year after the crisis began, the U.S.-based Aspen Institute's Business & Society Program convened an influential group of business and other leaders to publish a call to action: It's time to shift from the rampant short-termism that symbolized the pre-crisis era to a long-term focus on value that will guarantee success in the reset economy.
The subtext of this message is a theme BSR will highlight at our 2009 Conference and beyond: Delivering business value means embracing long-term sustainability trends. This week's feature article examines the role of "long-termism" in the financial services industry, as more mainstream investors integrate environmental, social, and governance criteria (ESG) into their investment decisions as strong indicators of a company's ability to plan for long-term, strategic growth.
For more on how this trend is playing out in developing countries, see our review of a new report on ESG practices in emerging markets.
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In Depth
The Value of Using Environmental, Social, and Governance Criteria in Mainstream Investing
By Laura Gitman, Managing Director, Advisory Services, BSR
The 2008 global financial crisis renewed attention on the value of integrating companies' social and environmental performance into mainstream investment analyses. This article examines several important developments related to ESG integration that all public companies should consider when thinking about how to manage ESG issues and communicate to investors.
Read more →
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Spotlight
U.S.-China Climate Commitment at WEF Opens Door to Business Opportunities
By Ryan Schuchard, Manager, Climate and Energy, BSR
Last week at the World Economic Forum in China, the United States and China announced a commitment to a cooperative clean energy plan that includes a trillion dollar market for low-carbon technology, special economic zones, and research and development to scale up renewable energy, carbon capture and storage, and smart-grid markets.
As we head to Copenhagen this December, a commitment such as this one between the United States and China is a necessary milestone if the countries—which emit about 50 percent of the world’s greenhouse gasses—are to make progress on stabilizing the climate.
Companies can take advantage of these new developments by engaging Chinese suppliers on energy efficiency. The Energy and Climate Registry in China can help you get started, or to kick off your own supply chain energy-efficiency program, contact Ryan Schuchard to learn about BSR models and approaches that work.
Toolbox
Environmental, Social, and Governance Practices in Large Emerging Markets
According to a recent review by the Ethical Investment Research Service, Sustainable Investment Research Analyst Network, and the Social Investment Forum, corporate responsibility practices—especially those related to board practice, bribery, human rights, supply chain labor standards, health and safety, environment, climate change, and biodiversity—are gaining traction in companies based in emerging markets such as Brazil, China, India, Russia, South Africa, South Korea, and Taiwan.
The study highlighted several key findings:
- Companies scored higher on issues related to the environment than on social or
governance issues.
- Emerging market companies are behind when it comes to good reporting practices on climate impacts.
- Most companies disclosed key governance information, including director compensation (33 out of 40 companies).
- Brazilian and South African companies in particular developed some of the first responsible investment indices in emerging markets, primarily due to investor interest in ESG performance.
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