Trends Corporate strategy 2/4


certainty during this time of change. And the challenge is not just for indi- vidual or institutional investors, but also for companies and how they invest and reinvest, too. A recent McKinsey Global Survey found that most executives believe their companies are underinvesting, and even missing out on worthy opportuni- ties, due to fears around market volatil- ity. The tragedy is not just the missed opportunities for individual companies, but also how a lack of investment over time can adversely affect whole economies, along with job creation efforts too. There is some good news out there, can which help investors investment taking the long-term view. Life Technologies, a global biotechnology tools company, has seen its stock price generally take an upward trend over the past five years, outperforming the NASDAQ Top 100 by around 8%, and the entire index by around 30% during this period, despite the general volatility in the market since the onset of the


the principles they need in navigating towards sustainable establish success. According to a study by Harvard Business School, sustainability-focused companies significantly outperform traditional firms in terms of stock market and accounting performance. ‘Taking a long-term view’ is cited as the key enabler for this success; not usually a feature associated with investors, or business in general, either. One of our recent case studies provides a useful insight into the relationship between sustainability, business performance, stock value and global financial crisis in 2008. The key to investor confidence is, of course, providing year on year growth and high quality of earnings, and Life Technologies continues to deliver on both counts: in 2010 the company experienced 9% growth in revenue and 17% growth in earnings per share. This level of business performance is itself under- pinned by what the company calls Radical


Efficiency: a range of business improvement initiatives, including the integra- tion of sustainability principles. Each year, sustainability initiatives con- tribute an increasing amount to Radical Efficiency performance, and could represent the major share of efficiency savings for Life Technologies within 5-10 years. It is also clear that the contribution of an increasingly sustainable product portfolio will provide a greater contribution towards growing the top-line. For Life Technologies, radical effi- ciency takes a long-term perspective, seemingly at odds with the very short-term demands of shareholder capitalism. Despite this apparent tension, investors are slowly becoming more sensitised to the importance of sustainability issues and their direct impact on long-term investment performance.


Any good investment of course relies on a robust assessment of the business model, and how money will be made and sustained. Investors need to be mindful of the full range of factors to be included in the investment decision. Conventional approaches here are coming under increasing strain, as the era of abundant and cheap resources draws to a


According to a study by Harvard Business School, sustainability- focused companies outperform traditional firms in terms of stock market performance

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