A few days back, I wrote about a study conducted by A.T. Kearney into the value of true corporate sustainability programs on a company's market valuation. Wanted to add some thoughts from an article that was published in The McKinsey Quarterly a few months back called "Valuing corporate social responsibility: McKinsey Global Survey Results." It seems especially pertinent to write about this topic again this week, given that NASDAQ has finally moved to launch its own sustainability index.
The McKinsey research attempts to assess whether specific financial metrics can be tied to these programs, and it gauges the opinions of CFOs, investment professionals, institutional investors and executives in charge of corporate social responsibility programs. (There were 238 individuals included in the study, which was fielded in December 2008.) The overall opinion of the respondents is that these efforts absolutely do create value; the problem is that most also think this value is too intangible or too long-term to measure.
That said, here are the top ways that the surveyed executives believes sustainability and corporate social responsibility could impact value.
Other ways in which respondents felt these programs could have an impact on value:
- Improving risk management
- Strengthening competitive position
- Improving access to capital
While global economic conditions were seen as having mitigated the potential good that could come out of environmental programs, the respondents felt that these efforts would increase value over the long term.
I'll close up this entry with one very high-level observation: the data suggests that the more tightly integrated a sustainability program or a corporate social responsibility program is into a company's core business values, the more likely it is to have an impact on value (positively OR negatively). Interestingly, the CFOs answering the McKinsey survey were more likely to consider these programs according to the bigger picture than the corporate social responsibility professionals.
This data point suggests to me that while it's good to put someone specific in charge of sustainability or corporate social responsibility efforts, in order to shepherd projects and assume responsibility for their delivery, these programs will have a more profound impact on "value" when they're considered within the entire portfolio of a company's performance metrics.