READ AND GROW RICH
WHERE IS THE GOOD NEWS?

SUSTAINABILITY BRINGS "GREEN" FINANCIAL PERFORMANCE

A recent study by A. T. Kearney finds that "companies committed to corporate sustainability practices are achieving above-average performance in the financial markets during this slowdown. In 16 of 18 industries examined, companies recognized as sustainability-focused outperformed their industry peers over both a three- and a six-month period, and were well protected from value erosion. Over the three-month period, the performance differential came to 10 percent; over six months, the differential was 15 percent."

Check out the report, "Green Winners: The performance of sustainability-focused companies during the financial crisis" at http://www.atkearney.com/main.taf?p=5,3,1,262 . Sustainability practices protect the environment, promote social well-being, and achieve shareholder value. The analysis included 99 sustainability companies from the Dow Jones Sustainability Index (DJSI) or the Goldman Sachs SUSTAIN focus list.

The following characteristics

represent those firms that passionately and successfully pursued sustainability as its passionate purpose:

  • Maintain a long-term planning perspective with a five-year or longer outlook rather than a focus on short-term gains

  • Have strong corporate governance which oversees management activities to ensure policies, processes, and people that serve the needs of stakeholders. This requires a degree of transparency and boards of directors free of conflicts of interests.

  • Practice sound risk management with a five- or 10-year outlook.

  • Build from a solid history of investing in green innovations.

Practical Pointer. Companies are well served to examine all their sustainability practices and strengthen how genuinely committed they are to them.

Theresa M. Szczurek (www.TMSworld.com and www.PursuitofPassionatePurpose.com)

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