Investors as drivers of sustainability management

October 17, 19
Just a few years ago, it was only investors who specialize in sustainability who were interested in the sustainability performance of companies. Today, there is hardly a mainstream investor who can avoid keeping an eye on the ESG (environmental, social, governance) performance of their portfolio.

This requires teams of analysts who try to objectively examine and evaluate the performance of companies on the basis of sophisticated indicator systems. Bad results can sometimes even lead to exclusion from ESG indices such as the Dow Jones Sustainability Index. 


If you look at the data with which the performance of sustainability management is measured, you can see that so far it has mostly been "output" data. For example, sustainability reports at group level consolidate how much CO2 is emitted, how the quota of women in management positions is developing or how many suppliers are audited. 


However, effective management of ESG issues or the impact of a company on society and the environment is only possible if the effect or impact of activities is fully understood. It is relevant to control and to understand how a certain activity or intervention works locally in the medium and long term. It is therefore crucial to identify outcomes and impacts, to measure and evaluate them. Of course, the focus should not only be on intended positive effects, but unintentional negative effects should also be included. Only then is it possible to compare the effects of various measures and to holistically assess the returns on investment. Not only managers benefit from the increased measurability and comparability of social and ecological effects, but also investors who have to make and justify their investment decisions. 

In our full article by Denise Weger, Corporate Responsibility Manager, Strategic Initiatives at  Novartis and Steffen Rufenach in the magazine "Verantwortung" (german edition) you can read how Novartis solved this issue: Wie soziale, ökologische und ökonomische Auswirkungen für Novartis mess- und vergleichbar werden


Steffen Rufenach
social_circle_linked_in social_circle_xing