Boost sustainability performance to attract investment

By Remsol Limited

22 Jun 2016

New research among 3,000 respondents across 100 countries has found that nearly half of investors say that they won’t invest in a company with a record of poor sustainability performance, which means, if you're looking to raise investment capital, you need to raise your sustainability performance first.

Among the key learning points from the research, conducted jointly by the Boston Consulting Group and MIT Sloan Management Review, were:

Investors believe that sustainability creates tangible value

Seventy-five per cent cite improved revenue performance and operational efficiency from sustainability as strong reasons to invest. More than 60 per cent believe that solid sustainability performance reduces a company’s risks. Nearly the same number also strongly believe that it lowers a company’s cost of capital.

Although a sustainability strategy is considered important, few companies have developed one

Nearly 90 per cent of respondents say that a sustainability strategy is essential to remaining competitive. However, only 60 per cent of corporations have such a strategy. Although a clear business case is central to the strategy, only 25 per cent of respondents say that their companies have developed one. Business model changes are also central. Organisations that have made a sustainability-related change to their business model are twice as likely to report profit from sustainability than companies that haven’t.

The message is clear: investors make decisions based not only on the financial strength of businesses but also on sustainability performance because they recognise that it can add value by reducing costs, boosting profits and avoiding risk.

Understanding and then improving sustainability performance

If you're thinking about raising fresh investment, whether that be debt or equity finance, it makes sense to first understand your current level of sustainability performance and to think about how you can improve it given its growing importance to investors.

There are lots of tools out there to help. Here at Remsol, we’ve developed a unique maturity model that we use to evaluate sustainability and resilience performance across up to 30 separate measures, codifying that performance as either Beginning, Improving, Succeeding or Leading.

When you report your performance, it's important to remember that investor-friendly language is a comparative language. Sustainability is only relevant if it can be compared to a competitor, past performance, or new market development.

In March 2010, the United Nations Environment Programme (UNEP) and the World Business Council for Sustainable Development published the results of a study that attempted to better understand how ESG (environmental, social and governance factors, including sustainability) can be translated into sustainable business value. Their report identified a number of ‘investor wants’ which include: Companies should provide data on how ESG factors influence their operations and commercial performance. Companies should provide a clear link between ESG factors and financial materiality in annual reports. Companies should show ESG as a means to reduce volatility. The recommendations for businesses are unequivocal: draw clear links between ESG factors, sustainability, financial performance and strategy.Takeaways for businesses seeking investment

If you’re thinking of exiting your business or leveraging in new sources of finance to help you grow, you need to better understand how your sustainability performance can affect your chances of success. Remember, poor sustainability performance = lower business valuations and reduced investor confidence, and so you need to: Evaluate your sustainability performance, identifying and fixing weaknesses. Track your performance and link it to KPIs and your financials. Report your performance and show how it strengthens your financials. Timing is everything. It makes sense to consider these actions at the very early stages of planning your exit strategy or investment and growth plans, so you have time to evaluate, understand and improve your sustainability performance ahead of seeking buyers or investment partners.

Enjoyed this? Read more from Remsol Limited

Latest news

1

Supermarket stays put in blow to town's £250m masterplan Blackburn Aerial

Supermarket stays put in blow to town's £250m masterplan

28 Mar 2024

2

Modern Milkman acquires American counterpart article placeholder listing image

Modern Milkman acquires American counterpart

28 Mar 2024

3

How the UK’s strategy to reduce net migration affects care work AdobeStock_89838327 (1).jpeg.jpg

How the UK’s strategy to reduce net migration affects care work

28 Mar 2024

4

Dealmakers: Star Tissue takes a leading roll Khalid Saifullah

Dealmakers: Star Tissue takes a leading roll

28 Mar 2024

5

Construction work begins at 53-home development in Earby article placeholder listing image

Construction work begins at 53-home development in Earby

28 Mar 2024

Hwc 2024 Email Signature 980x120
Background image for hub sign up block

LBV Hub

Reach 50,000 members of the Lancashire business community

Post your news
Post your events
Post your offers
Company profile
Social reach
Magazine coverage
Sign-up
Events
Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
28 Mar 2024

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Business Networking in Lancaster - BNI Castle
EVENT LISTING BNI Castle.png.png
LBV Hub Networking
28 Mar 2024

Business Networking in Lancaster - BNI Castle

Vale of Lune RUFC, Powder House Lane, Lancaster, LA1 2TT

06:45 - 08:30

Business Networking in Preston - BNI Brunch
EVENT LISTING SIZING Brunch .png.png
LBV Hub Networking
29 Mar 2024

Business Networking in Preston - BNI Brunch

Samlesbury Preston Hotel, Preston New Road, Preston, PR5 0UL

09:30 - 11:00

Business Networking in Blackburn - BNI Infinity
EVENT LISTING BNI Infinity.png.png
LBV Hub Networking
29 Mar 2024

Business Networking in Blackburn - BNI Infinity

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:30 - 08:30

Business Networking in Chorley - BNI Endeavour
EVENT LISTING SIZING Endeavour.png.png
LBV Hub Networking
02 Apr 2024

Business Networking in Chorley - BNI Endeavour

Oak Royal, Bury Lane, Chorley, PR6 8SW

06:30 - 08:30

Business Networking in Blackburn - BNI Vista
EVENT LISTING SIZING Vista.png.png
LBV Hub Networking
02 Apr 2024

Business Networking in Blackburn - BNI Vista

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:45 - 08:30

Business Networking in Accrington - BNI Zeus
EVENT LISTING SIZING Zeus.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Accrington - BNI Zeus

The Mill House, Corn Mill Yard, Accrington, BB5 5HX

06:45 - 08:30

Business Networking in Preston - BNI Diamond
EVENT LISTING BNI Diamond.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Preston - BNI Diamond

The Marriot Hotel, Garstang Road, Broughton, PR3 5JB

07:15 - 09:00

Business Networking in Lancaster - Eden Business Network
EVENT LISTING Eden Business Network.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Lancaster - Eden Business Network

The Borough, 3 Dalton Square, Lancaster, LA1 1PP

18:30 - 20:30

Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
04 Apr 2024

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Business Networking in Lancaster - BNI Castle
EVENT LISTING BNI Castle.png.png
LBV Hub Networking
04 Apr 2024

Business Networking in Lancaster - BNI Castle

Vale of Lune RUFC, Powder House Lane, Lancaster, LA1 2TT

06:45 - 08:30

Business Networking in Preston - BNI Brunch
EVENT LISTING SIZING Brunch .png.png
LBV Hub Networking
05 Apr 2024

Business Networking in Preston - BNI Brunch

Samlesbury Preston Hotel, Preston New Road, Preston, PR5 0UL

09:30 - 11:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv115 Online Graphic
Subscribe now

Weekly news bulletin