Sustainability and boron value sound like a contradiction in terms. And indeed: Sustainable companies seldom have an easy time in securities trading
It’s like wine. If organic farming is written on the bottle, consumers give it a wide berth on the shelf because they fear – often wrongly – a sour drop. As a result, many winemakers do not use the oko label, even if their wine is organically grown. Even on the stock exchange, sustainable economic models do not always have it easy. The securities market rewards sustainability only in exceptional cases. At best, companies with a decidedly sustainable orientation, such as wind or solar power companies, can score points with this.
To all others, experts recommend: better not to go to the stock exchange in the first place. The reason is that investors and analysts want to read good news in the quarterly report that every listed stock corporation has to submit. Sales, expenses and profits should lead to climbing shares and rich dividends. This is usually accompanied by rationalization, restructuring and staff reductions: the opposite of sustainability. The nervous quarterly report stands in the way of long-term growth targets, because they do not appear in it.
Loud market noise
That could change soon. More and more consumers are demanding sustainability. They want "green" products, socially responsible companies and transparency in the supply chain. Controversial companies such as Wal-Mart have shown that sustainable business practices can be implemented even in large global corporations. The U.S. retailer – known for its ruthless business practices – has been emphasizing a "green supply chain" since last year and is making efforts to trace the origin of its products. Even skeptics acknowledge the effort, given Wal-Mart’s sheer size and market dominance.
In the meantime, management consultancies such as McKinsey have also identified a trend toward long-term corporate goals. In an interview with The McKinsey Quarterly, former U.S. Vice President and climate activist Al Gore said: "I believe that supervisors have a growing responsibility to address these ies. As stewards of investors’ interests, they should focus on the future viability of a company rather than market noise."Along with Al Gore, David Blood, former chief executive of the investment bank Goldman Sachs, argues for a change in thinking: "Investing in sustainability is a clear affirmation that social, economic, environmental and ethical factors have a direct impact on business strategy."
Value enhancement through sustainability
A rethink is also slowly beginning in this country. Consumers and companies have become more sensitive. Because the number of legal requirements and regulations on climate protection, for example, is constantly increasing, the image of a company and the reputation of its products often also depend on sustainability aspects. "Thinking and acting sustainably increases the value of a company," asserted Brigitte Falk of the software company SAP recently at a Berlin conference on sustainability in the information industry. According to Falk, long-term investments could account for between sixty and eighty percent of value creation.
Sustainability and sustainable business are not limited to environmental investments alone. Nevertheless, these play a supporting role. Renewable resources, efficient energy production and the reduction of transportation and infrastructure costs are at the top of the agenda. Companies with immense energy costs, such as the rapidly growing steel industry, have a natural interest in reducing costs. "Competitive advantages come from answers to the problem of finite resources," explains Brigitte Falk.
But "soft" factors such as teleworking and part-time models, further training and diversity management, which have a favorable effect on the image and internal climate of a company, also have a part to play in long-term value creation. The current shortage of skilled workers is not least a sign of unsustainable corporate and training policies.
Sustainable urinals at SAP
Some companies have recognized this and are counteracting. At SAP, the signs are pointing to long-term investments. The company supports the climate protection declaration of the United Nations and obtains its electricity from photovoltaic systems and its own combined heat and power plant. Working time accounts and home offices are just as much a part of sustainable corporate policy as technical innovations such as urinals refined with nanotechnology that manage without any water at all.
Motorola has a long tradition of climate protection ventures and sustainability. For the past twelve years, the company has maintained an environmental laboratory in Taunusstein, Germany, where researchers work on the development of environmentally friendly products, prepare eco-balances, and organize the take-back and disposal of products. Since its founding, Motorola has committed its employees to an ethical code of conduct that includes sustainability.
Green IT" is almost a buzzword among IT companies. CeBIT will present a special focus on this topic next year. Even if the industry, as critics accuse it, undermines any sustainability through its own growth, examples such as the web hoster Strato, which last week was awarded the Berlin Environmental Prize of the BUND (Friends of the Earth) are convincing. In the last 18 months, the company has been able to save thirty percent of energy per customer by switching to particularly energy-efficient servers. In addition, Strato plans to source its electricity from hydropower starting in 2008. It can hardly be amed that this has harmed the parent company freenet AG, which is listed on the stock exchange.