Friday, October 08, 2010
Sticker Shock
Interesting report out this week from the United Nations’ program for responsible investment on the cost – in dollars and cents – of corporate environment damage. I highly recommend giving it a read if you haven’t seen it. It’s available here.
When we talk about building the business case for sustainability, we encourage people to place the conversation within the context of how sustainability can contribute in a positive way to revenue growth, cost reduction, innovation and shareholder value. Tying green initiatives to shareholder value is an incredibly important piece of the value proposition and one that I don’t think has received the level of discussion it deserves.
The eye-catching stat from the report is that the environmental damage caused by the world’s 3,000 largest public companies in 2008 cost a staggering $2.15 trillion! And that figure is projected to increase in the future. Environmental costs, the report argues, have the potential to negatively impact future cash flow and dividends, and lead to greater environmental risks. I’m guessing that most institutional investors wouldn’t be keen about having to navigate that scenario.
When it comes to the environment, companies are more exposed than ever before. We’re already seeing companies being asked to foot a significant portion of the bill for ecological mishaps and disasters. As a result, technology’s role in mitigating this type of risk – however small – shouldn’t be overlooked. The business case for sustainability is just as much about shareholder value as it is revenue and being a good corporate citizen.
If you’re in Portsmouth next Friday, come to TechWorld 2010 (www.techworld2010.com) on the Pease International Tradeport. Trade Wings’ Todd Adelman is going to be discussing how companies can build a stronger business case for sustainability.
