Economics of Going Green

February 14, 2017 Oak Ridge Investments

  

 

 

 

 

Companies themselves are seeing the value of adopting ESG pillars, not just in reputation but in internal efficiencies and culture.  One Cone Communications study explored how consumers are willing to forgo elements like salary if a company is progressive in its ESG values:  62% of consumers would work for a socially or environmentally responsible company, even if the salary was less than they’d receive elsewhere. In fact, a Net Impact report suggests that 45% of employees would take a 15% pay cut for a job that makes an impact – and that these trends are consistent across generations.1     

Furthermore, a Deutsche Bank Climate Change Advisor report found that SRI strategies were correlated with superior-risk adjusted returns at a securities level, and companies with higher SRI/ESG ratings have a lower cost of capital in terms of equity.2 It also found that companies with high ESG ratings tended to exhibit market-based and accounting-based outperformance.

Engaging with social causes also presents an opportunity to explore new markets, product applications and partnerships. With the right partnership, companies have the chance to lower supply chain and operational costs by improving capacity and efficiency.

Ultimately, by intentionally linking operations with socially and environmentally responsible causes, companies can potentially meet (or exceed) business goals while improving their communities.

Global Consumers Willing to Make Personal Sacrifices to Address Social and Environmental Issues.  Cone Communications.  5/27/2015

What Workers Want. Net Impact. 2012

Doing Well While Doing Good: SRI.  CNBC.com  9/24/2015

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