Trends Corporate strategy 4/4


markets to address real needs while inte- grating environmental, social and gov- ernance (ESG) metrics throughout the decision-making process.


Gore also points out that around $30 trillion of assets are currently signed up to the UN Principles for Responsible Investment – some 20% of the world’s capital – and says: “If the majority of those assets were actually shifted into truly sustainable investment models, the effect would be dramatic and would signal that Sustainable Capitalism is entering the mainstream.”


And there are real signs that investor behaviours are changing, albeit slowly, in response to the challenges they face, but also motivated through enlightened self- interest – the need to protect the value of their assets.


In 2011 nearly 30 Investor organisations, representing over $170B of assets, urged the US Environmental Protection Agency to initiate a review process to evaluate the mine waste impacts of a proposed mine on Alaska’s Bristol Bay watershed, which produces roughly half the world’s commercial supply of wild sockeye salmon. The group of investors, led by Trillium


Asset Management Corp and Calvert Investments, collectively holds over 13 million shares in Anglo American plc, the UK-based mining company. They recognised the combined impact and risks associated with the proposed mine could have a devastating impact on the natural habitat and local economy. They also recognised the potential


for significant environmental costs, tak- ing heed of the UNEP FI Universal Ownership Report, and the consequential risk to company earnings and there- fore investor returns. They calculated that 50% of company earnings could be at risk if this project were to proceed. Taking a far-reaching view, they could also see that any problems with this project could cast a shadow over all mining projects, even responsible and safe ones, which could destabilise the global min- ing industry. This led to the investors issuing a statement to call for a review process as a responsible and crucial step. Microsoft provides a further example of a company responding positively to activist shareholder pressure. The New York City Pension Fund, an institutional investor, was keen to make sure its invest- ments were protected from any adverse


affects on company revenue that could be brought on by labour, environmental or other issues involving Microsoft. As a result, Microsoft will now make sup- plier sustainability disclosure mandatory from 2013.


Just like business leaders, the workforce and the wider population, inves- tors are going through their own transformation, as they too try and make sense of the post crisis world, and move stutteringly towards a sustainable, low carbon economy. There is still some way to go, before quantification of sustainability principles, risks and opportunities becomes a mainstream consideration for investors.


But, given the very real impact of key issues like climate change, energy and resource scarcity, along with increasing regulation and reputational risks, it is only a matter of time before we see a clear and direct relationship between sustainability impact, business perfor- mance and stock price.


Michael Townsend is CEO of Earthshine Solutions / @mike_earthshine / earthshinesolutions.com / sustainablebusinesslab.org

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