BSR Insight Articles About Strategy & Integration
Four Ways to Attract Long-Term Investors
Laura Commike Gitman, Managing Director, Advisory Services, BSR, and Hélène Roy, Intern, BSR
In 2011, the California Public Employees' Retirement System (CalPERS) adopted a "total fund" approach to sustainable investment, through which it committed to integrate the analysis of its portfolio companies' environmental, social, and governance (ESG) performance into all of its investment strategies. Like other pension funds or foundations, CalPERS has long-term liabilities and a fiduciary duty to its members, which, for CalPERS, is set out in California's constitution. By taking a wider perspective and by incorporating ESG criteria into its investment-decision process, CalPERS believes it can increase the financial performance of its portfolio and better achieve the long-term, risk-adjusted returns on which its members rely. For CalPERS' portfolio companies, this means their ESG performance is under greater scrutiny. For example, the pension fund will pay particular attention to a company's governance structure because poor governance often translates into poor decision-making and a decline in shareholder value. In another example, CalPERS will closely monitor emerging-market companies to ensure no infringement of social and human rights principles. CalPERS, with its focus on ESG integration, is not alone among mainstream investors—even in today's relentlessly short-term-focused economy. As evidenced by the growing number of UN Principles for Responsible Investment (UN PRI) signatories, asset owners and investment managers are embracing sustainable investing. As of June 2012, the 1,100 UN PRI signatories collectively represented US$32 trillion of asset under management, or 25 percent of the world's total financial assets. Two key drivers are leading this trend: Read more
Climate 2.0: What Is Expected of Business Now?
Ryan Schuchard, Manager, Climate and Energy
Business at large has only recently awakened to climate change—really just within the last 10 years. It started slowly, following the 1997 adoption of the Kyoto Protocol, and then it picked up speed after the development of industry-accepted greenhouse gas (GHG) monitoring and reporting standards such as 2001's GHG Protocol and 2003's Carbon Disclosure Project (CDP). Read more
Open for Business: The ‘Four Cs’ of Integrated Strategy
Mark Little, Director, Healthcare, Advisory Services David Korngold, Manager, Advisory Services
Surveying the tumult of global business and the consternation of society, it is tempting to stand astride the corporate ramparts and declare, "The corporation is dead … long live the corporation!" Old models of doing business are being deposed while new models are ascendant. Powerful trends are converging to create profound implications for sustainability and corporate strategies. These forces include market dynamics, such as accelerating innovation cycles, disruptive technologies, emerging markets, value chain complexity, and regulatory and voluntary standards; sustainability dynamics, such as climate change, demographic shifts, and resource constraints; and stakeholder dynamics, such as the growing engagement of consumers, NGOs, and regulators. At the nexus of these trends, integrated corporate strategies address both sustainability challenges and rapidly changing market conditions to generate business value. Based on BSR's 20 years of developing such integrated strategies for dozens of companies and in collaboration with a panoply of stakeholders, we have created the "Four Cs" to help companies build integrated strategies by looking at customers, competitors, the corporation, and civil society and government. Read more
Supply Chain Sustainability: Four Lessons From the Past and Four Ideas for the Future
Cody Sisco, Former Manager, Advisory Services
When I first joined BSR less than a decade ago, the companies investing in supply chain sustainability were primarily in the apparel, footwear, and toy sectors. Today, all industries prioritize supply chain sustainability, including the biggest brands in electronics, consumer goods, transportation, and other industries. The number of standards also has multiplied, reflecting a broader set of topics and participants. In the early 2000s, priorities were wages, working hours, and health and safety. Today, issues also include environmental performance and anti-corruption. Product certifications and labels have also exploded. An entire index exists just to catalogue the number of new eco-labels launched every year. But what progress have we made toward improving the lives of workers in supply chains and protecting the ecosystems that support industry and commerce as well as human survival on this planet? Although supply chain sustainability management practices have evolved significantly, we have an opportunity to re-examine traditional approaches and achieve measurable, dramatic improvements. Here, I suggest four lessons we can take from supply chain sustainability efforts to date, and four ideas we can apply to achieve greater impact going forward. Read more
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