Opinion

Sustainability: Lip Service or Action?


With most publicly listed companies jumping on the sustainability bandwagon, how do investors differentiate companies which pay lip service to sustainability and those which are serious about sustainability? This is a growing concern as tens of thousands of listed companies across the world compete for investor attention and capital.

Sustainability efforts should be at the heart of corporate business goals and objectives. By adopting sustainability as a business imperative, corporates can create shared values amongst stakeholders, paving the way for long term positive impact on the key central factors of sustainability – environmental, social and governance (ESG).  Corporates can be a positive force in the global push on sustainability and it would serve them well to elaborate on these efforts to an increasingly socially-minded investor community.

Investors today are more inclined to invest in corporates with sound ESG practices as studies have shown that corporates which pay more than lip service to ESG and incorporate best practices into their business processes return a better corporate financial performance, and are sustainable over the long-term.

The 5th Responsible Business Forum on Sustainable Development will be held on 22-24 November 2016 in Singapore, a forward-thinking country that continues to promote sustainability. The Singapore Exchange in June 2016 introduced sustainability reporting on a comply or explain basis to meet the growing interest in sustainability from retail and institutional investors globally. How corporates respond to this unconstrained regulation, will demonstrate how well sustainability is integrated into their business.  Corporates should view this as an opportunity to get ahead of their peers in terms of reporting on environmental, social and governance efforts.

Investors with access to additional resources and bandwidth may take the cautious step of verifying management’s sustainability reports, checking with sustainability research organizations that are well positioned to advise on sustainability best practices and track if management has delivered on its promises. In the light of this, corporate transparency and credibility are at stake and management would do well to allocate time, resources and senior leadership support to this initiative.

 

Clarence Fu, Partner, Financial Practice, Bell Pottinger
Bell Pottinger is an international full-service communications consultancy, headquartered in the UK, with a Middle East HQ in Dubai and four offices in Asia with Singapore as the HQ.  Bell Pottinger is the appointed communications agency for the 5th Responsible Business Forum on Sustainable Development.

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