Increasingly investors see sustainability as an opportunity and a business advantage, but most also say companies don’t successfully communicate how “sustainability initiatives are linked to their strategy, financial performance and value in meaningful ways.”
If you’re an investor looking for alpha, how does a growth rate of 76 percent over two years’ time sound? That’s the rate of increase in socially responsible investment assets from 2012 to the start of 2014. Those assets totaled $6.5 trillion dollars, by the way. According to the Forum for Sustainable and Responsible Investment, US SIF, from 1995 to 2014 the SRI sector increased 929 percent, with a compound annual growth rate of 13.6 percent, some pretty impressive figures.
Los Angeles, September 23, 2014 /3BL Media/ – CBRE Group, Inc. today announced that it has been recognized for climate-change disclosure transparency through its inclusion in CDP’s S&P 500 Climate Disclosure Leadership Index (CDLI). The annual index spotlights Standard & Poor’s 500 companies that have demonstrated a high level of transparency and data quality in their disclosure of climate-related information. Sixty-three S&P 500 companies are featured in the 2014 CDLI. This is the second year that CBRE has achieved a position in CDLI.
While I was on the road for Center business a couple of weeks ago, I caught BlackRock CEO Larry Fink on Squawk Box. Fink is bullish on U.S. equities. With $4.4 trillion under management, he is someone who a lot of investors listen to, whether they agree with him or not. The panel of Squawk Box interlocutors was discussing with Fink how our dovish Fed is dampening volatility (and trading volume) in the markets, reducing the opportunity to make quick money. Fink’s position in this conversation caught my attention.
Raising capital from banks, venture capitalists, and professional investors is a challenge—especially when your business falls into the category of a social enterprise or socially responsible business (“SE/SRB”). Despite the best efforts of SE/SRBs at sorting out financial projections, putting together business plans, applying for loans, and making presentations (a.k.a. pitching), most will be turned away by these types of investors.
When we hear the title Chief Financial Officer, we tend to think of financial performance indicators, not corporate social responsibility. However, the mindset among CFOs toward CSR is changing. CSR highlights various reputational and operational risks that shouldn't be overlooked, including compliance issues.