Continuing the theme of the future of ESG/sustainability professionals … Here is some good news from MorganStanley. They released the first edition of Morgan Stanley Sustainable Signals: Corporates survey. The survey was conducted in 1Q24 using responses from 303 sustainability decision makers at public and private companies with over $100 million in annual revenue across North America, Europe and APAC. Cutting right to it, here are my favorite points:
“Value creation is the top reason for a company to pursue its sustainability strategy, closely followed by legal requirements. Over half of respondents report that sustainability is a factor in core business decisions such as capex, R&D, lending, new products and M&A. Across the board, companies consistently selected financial issues as key drivers, enablers and barriers of their sustainability strategies, ahead of non-financial factors such as societal expectations or responsibilities to trade bodies…
Looking ahead, almost three quarters of respondents believe that sustainability could bring rising cost pressures whether from raw materials, regulation or changing existing processes. Despite this, more than 80% see opportunities for sustainability to drive stronger cash flows, higher profitability and higher revenue growth in the coming years. These apparently contradictory views could reflect relatively low visibility on costs, short term cost headwinds leading to longer term financial benefits or a belief that companies will be able to manage through the pressures.”
In-house ESG/sustainability professionals (and external advisors) take heed:
- Stop using investor demands/priorities as a crutch for your efforts or job;
- Get a deep understanding of how your company makes money and why, including customers’ key buying criteria; and
- Learn about operating costs and the basis for them.
You’ve heard this plenty from me in the past. PracticalESG.com has resources for members to confidently link their efforts to business fundamentals in a practical and simply way – and more are coming. If you aren’t a PracticalESG.com member with access to this and other resources, sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund.
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