Does Sustainability Pay Off?

“Is the adoption of sustainability practices a form of strategic differentiation that can lead to superior financial performance? Or, is it a strategic necessity that can ensure corporate survival but not necessarily outperformance?” That’s the question asked in a Harvard Business Review article that studies how sustainability affects business. Authors Ioannis Ioannou and George Serafeim found that “Our exploratory results confirm that the adoption of strategic sustainability practices is significantly and positively associated with both return on capital and market valuation multiples. The data suggests that some companies are creating real strategic advantage by adopting sustainability measures their competitors can’t easily match.” Either way, sustainability looks like a winning bet in today’s turbulent business climate.

John Howell, Editorial Director