Banks, insurance companies, private equity funds and other institutional investors are now considering the sustainability rankings of the companies in which they invest.
As sustainability issues intertwine with business strategy, institutional investors are starting to view financial and non-financial performance together. Good IR can be a key factor in the price of a company’s shares and the interest rate it pays on its debt, so CFOs must stay up to date on their companies’ sustainability policies.
Shareholders speak out. Shareholder voting patterns provide convincing evidence of investors’ belief that a company’s social and environmental policies correlate strongly with its financial performance. Sustainability is also influencing corporate governance, as shareholders pay closer attention to resolutions that tie social and environmental performance to issues such as compensation and the qualifications of board members.
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