Sustainable Business Ethics on the Minds of Investors

Sustainable business and business ethics were a hot topic on the “Sustainability Evolved: Embedding ESG Performance in Corporate Valuation” panel that sponsored by The Robert Zicklin Center for Corporate Sustainability and the Sustainable Practice Network.

The panel addressed how consulting firms are using ESG reports to promote long-term sustainability. This included discussions on climate change, greenhouse gas emissions, waste and recycling ratios and quantified renewable energy use.

Clearbridge Advisors’ Assistant Vice President or Environmental, Social and Governance Investment Karoline Barwinski spoke on the importance of business portfolios and how her organizations provides investment service and ESG portfolios.

“ESG is about integrating environmental, social, and governance factors into our portfolios and making sure the performance of the portfolio is comparable to traditional investing,” said Barwinski. “I hope we can come across an idea that ESG can perform and is another investment strategy and if done right, it can really work.”

While this disclosure is great, an audience member at the panel wrote in an interesting question. “The question reads, Paul McCartney said ‘If every slaughterhouse had glass walls, everyone would be a vegetarian.’ So the question is, is having too much disclosure a bad thing? Are some aspects of business better left in the dark?”

Each panel member agreed that full disclosure is the best method to ensure sustainability and goodwill. Companies and their investors should possess the best tools to ensure the measurement of profitability and the sustainability of their business.

But as sustainability has come to mean more than saving the environment, The Guardian’s Adrian Henriques believes that as social matters, including stability, stakeholder relationships and well-being, have become regulated, investors are looking past sustainability to the core of a company. It changes the direction of the business.

And with this change in business, companies need to look at ethics. The European Commission recently redefined CSR, recognizing that “the responsibility of a business is co-extensive with the results of its actions.”

How is your company adapting to changes in business stemming from CSR? Have you needed to address ethical issues with investors?