Sustainable Business Practices Can Impact The Bottom Line, Say This Quartet of Researchers -- Lessons Here For Busy Execs




Sustainable Business Practices Can Impact
The Bottom Line, Say This Quartet of Researchers
-- Lessons Here For Busy Execs

You can read our Top Story this week first and then you can forward this important commentary to your C-Suite if the execs there have been wondering how corporate sustainability may be impacting a company's bottom line, in positive ways

A quartet of experts writing in the Harvard Business Review has responded to the short-term, bottom-line pressures that we hear so much about throughout much of Corporate America.

To develop their case, the authors (three academics and a consultant) looked at Brazil's giant beef industry, a challenge for studying considering the size and complexity of the industry and its long-term impact on the planet.  (Brazil is the world's largest beef exporter and second largest consumer market for beef products.) 

Key finding:  "sustainable" and "deforestation-free" industry practices created significant financial benefits for all players in the industry value chain. Quantifying this, the authors found net benefits to ranchers ranging from 12% to 23% of revenues.  Sustainable agricultural practices provided the most financial benefits, while the uptake of deforestation-free commitments over time reduced risk to the industry and company components.

Their approach demonstrated (they write) that measuring the value chain of sustainable business can be done and the sustainable business itself can be cost-effective.  Brazil's beef industry impact on the plant has been intense (with de-forestation and GHG emissions) and there have been significant steps taken to address the issues involved.

One industry participant explained that while there is no price premium for sustainability alone, there is for quality, and the company's quality immediately increased with the adoption of sustainable practices.  Today, 70% of their beef products are sold with a quality premium, from "zero" two years ago. That resulted in increased revenues and greater customer satisfaction.

While the focus is on the Brazil beef industry (and the value chain from grower through the processor to retail) we think there's some good material here to help executives understand "the possible" bottom line impacts through sustainable business practices.

The authors are Tensie Whelan of NYU Stern School of Business, Center for Sustainable Business; Bruno Zappa, A. Kearney strategy consultant; Rodrigo Zeidan, of NYU-Shanghai and Fundacao Dom Cabril/Brazil; and Greg  Fishbein at The Nature Conservancy / Collaboration for Forests & Agriculture.

The academic authors worked with AT Kearney to develop the methodology for their case.  The work included research, data analysis and interviews with key players.  Organizations examined included McDonald's; Carrefour; JBS, Mafrig, Antea Group (all in Brazil); Infalora; Instituto Centro de Vida (ICV); and, The Nature Conservancy. 
And, they provided a link to the Excel spreadsheets on which they calculated the numbers for the article (it's embedded in the post).

Top Stories This Week...

How Do We Measure Sustainability?
(Friday - September 08, 2017) 
Source: EWN - Globally, there has been an increase in demand for higher transparency on environmental, social and governance issues. 

About Sustainability: Progress Is Being Made
- We See Forward Momentum!

Retail is Tapping Innovative Financing to Grow Sustainability, And It’s Working
(Monday - September 11, 2017) 
Source: The Energy Collective - Last year, the Retail Industry Leaders Association (RILA) and the Institute for Market Transformation (IMT) released two financing guides that focus on innovative ways to secure capital for energy and sustainability projects. 

The pendulum is swinging towards in-house sustainable sourcing’
(Monday - September 11, 2017) 
Source: Bakery and Snacks - ‘One of the most difficult issues associated with sustainable sourcing is whether companies should adopt third party standards or develop in-house schemes. 

Sustainability Now: Natural And Man-Made Disasters, From Atom Weather To Fire Ants
(Tuesday - September 12, 2017) 
Source: Daily Jstor - In the past two weeks extreme weather events have nearly drowned parts of Texas, wiped out several iconic Caribbean islands, and left thousands of people without homes in Mumbai. But while Mother Nature’s wrath can be... 

Achieving A Sustainable Urban America
(Wednesday - September 13, 2017) 
Source: United Nations - For the first time, an index from the United Nations looks to answer that question, for the 100 most populous cities. 

To Hire Star Millennials, Plug Successful Sustainability Efforts
(Wednesday - September 13, 2017) 
Source: Environmental Leader - As organizations look toward finding their next generation of executives, they can hardly avoid seeking out millennials, the generation defined in part by their increased use and familiarity with communications, media and digital... 

Chocolate Is Bittersweet: How Sustainability Practices Affect Shareholder Value
(Thursday - September 14, 2017) 
Source: Huff Post - Natural disasters due to climate change, violence and terrorism in volatile regions, increasing scarcity of food and water, wealth inequality and poverty, and the spread of deadly disease are expected to continue to threaten... 

Sustainability can be a good business case
(Friday - September 15, 2017) 
Source: Huff Post - In addition to helping create a better and more just world, there is a clear business case for companies to align their vision and practice with the sustainable development goals. 

Apparel Companies Unite to Measure and Improve Sustainability
(Friday - September 15, 2017) 
Source: CR Magazine - It’s hard to imagine two brands more different than Walmart and Patagonia, yet in 2009 they aligned their unique strengths and issued a call to the industry. In an invitation to some of the world’s largest retailers, then... 

Economy slows as sustainability rises
(Friday - September 15, 2017) 
Source: China Daily - The growth momentum of China's economy eased a little, with slower but fine-tuned growth in industrial output and investment, experts and officials said on Thursday. 

Sustainability of Food Production Goal of WWF
(Friday - September 15, 2017) 
Source: Pork Network - A lecture on food sustainability from an executive with the World Wildlife Fund (WWF) seems at odds with agriculture – until you understand the group’s rationale and their motives. 

New Ceres Report Calls for Sustainability Practices Across All Corporate Boards
(Friday - September 15, 2017) 
Source: Chief Investment Officer - Citing the impacts related to Hurricane Irma, a new report from Ceres suggests that corporate boards bring extreme weather events, climate change, and other sustainability issues to the forefront of their decision-making process... 


Our Focus This Week on A Range of ESG Topics & Issues -- Things to Think About...

Why the demand for ESG is not going away
(Monday - September 11, 2017) 
Source: Financial Planning - More and more investors are becoming interested in how their investment decisions support the issues that are important to the world at large. 

This is how much of your life air pollution is stealing from you based on where you live
(Tuesday - September 12, 2017) 
Source: Quartz - Air pollution is the single largest environmental health risk humans face, according to the World Health Organization, but what does that mean for you? Researchers have put together a map based on new findings that show... 

New York City aims to slash greenhouse gas emissions from buildings
(Friday - September 15, 2017) 
Source: tHE hILL - The new pollution standards, announced by Mayor Bill de Blasio (D) on Thursday, would require owners of large buildings to take steps to meet new fossil fuel caps, including upgrading boilers, water heaters, roofs and windows...

Census Bureau: Median Incomes Rose And Poverty Levels Fell In 2016
(Wednesday - September 13, 2017) 
Source: NPR - There's good news on three primary U.S. economic benchmarks: the poverty rate, income level and number of people covered by health insurance. 

China looks at plans to ban petrol and diesel cars
(Monday - September 11, 2017) 
Source: BBC - China, the world's biggest car market, plans to ban the production and sale of diesel and petrol cars and vans. 

Fires, droughts and hurricanes: What's the link between climate change and natural disasters?
(Monday - September 11, 2017) 
Source: LA Times - With Hurricane Irma smashing into Florida so soon after Hurricane Harvey flooded southeastern Texas — and as wildfires burn through the western United States — extreme events have been hitting the U.S. from all sides. To what... 


Headlines for You From the Corporate Sector -Both Positive & Negative

Microsoft, Disney among companies calculating carbon footprints – report
(Friday - September 15, 2017) Source: VOA News

Allianz ahead of all other insurers in Dow Jones Sustainability Index
(Monday - September 11, 2017) Source: Insurance Business Magazine

Philip Morris International Sustainability Report Outlines Fundamental Transformation to Shift Its Business to Smoke-Free Products
(Tuesday - September 12, 2017) Source: Business Insider

VW CEO vows to offer electric version of all 300 models by 2030
(Tuesday - September 12, 2017) Source: Seattle Times

Lawsuits against Equifax pile up after massive data breach
(Tuesday - September 12, 2017) Source: Reuters

The Inside Story of Marriott's High-Seas Rescue After Irma Stranded 620 Hotel Guests On St. Thomas
(Wednesday - September 13, 2017) Source: Forbes

JPMorgan pledges $40 million to Chicago for economic growth in underserved areas
(Thursday - September 14, 2017) Source: CNBC

EU report on weedkiller safety copied text from Monsanto study
(Friday - September 15, 2017) Source: The Guardian

Google Hit With Gender Pay Discrimination Lawsuit
(Friday - September 15, 2017) Source: NBC News 

Sponsored Message

News & Opinion: Asset Managers, US Pension Funds, Sovereign Wealth Funds

New York City Comptroller Launches Campaign for Corporate Board Diversity, Independence, and Climate Expertise
(Tuesday - September 12, 2017) Source: JD Supra 

Interview with Michael Baldinger, Head of Sustainable and Impact Investing at UBS Asset Management
(Wednesday - September 13, 2017) Source: Climate Action Programme 

Norway’s Sovereign Wealth Fund Bullish On Small Money Managers
(Thursday - September 14, 2017) Source: FIN Alternatives 

Hurricane Harvey - The Bigger Picture

Another Way Climate Change Might Make Hurricanes Worse
(Monday - September 11, 2017) Source: Bloomberg

Harvey and Irma to Slow US Economy but Rebound Should Follow
(Tuesday - September 12, 2017) Source: US News

‘It’s Devastating.’ Returning Florida Evacuees Stunned by Extent of Damage from Hurricane Irma
(Wednesday - September 13, 2017) Source: Fortune

After Irma, Florida prepares for days — and maybe weeks — without power
(Wednesday - September 13, 2017) Source: Washington Post

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Governance & Accountability Institute's blog focusing on the sustainable world evolving daily before our eyes.  Read it, absorb it, question it and challenge.

DJSI Results Announced — Are You In / Out? Attend Our Workshop in Collaboration with RobecoSAM in New York City on October 24th

This Is Hurricane Season in the Americas — And Climate Change Discussions Will Accompany News Reports About the Super-Storms Coming Ashore

Practitioner Workshop: DEMYSTIFYING THE CSA & DJSI

Millennials and Sustainable / Responsible / Impact Investing — A New Force To Be Reckoned With!

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