Sustainability drives value in companies in a variety of ways. Fuel savings, improved efficiency, less waste, energy efficiency, and goodwill are just a handful of examples. Yet while many companies reap the benefits of sustainability, few are calculating those benefits. A recent KPMG survey found that most companies are unable to measure the impact of sustainability on their bottom line. The authors highlight their findings in a recent press release:
- “72 percent of executives understand their sustainability strategies but only 19% can quantify how it will impact their future performance
- Four in five companies are unable to measure how sustainability affects profits, cash flow or valuation, leaving risks and opportunities largely unpriced
- 60 percent say they factor sustainability into financial planning but very few can translate it into EBITDA, CapEx or balance sheet impacts
- Sectors leading on the use of advanced valuation methodologies include banking and capital markets (33 percent), energy and natural resources (31 percent), and automotive (27 percent)”
This disconnect has real costs to sustainability programs and the companies they support. Sustainability is driving value, yet in many cases, the departments generating this value aren’t getting credit for their important work. Additionally, leadership lacks the data to support strategic decision-making. Companies are unable to maximize value generation from their sustainability programs because these metrics are lacking. Turning operational metrics into financial metrics can be challenging, but ultimately, the exercise is worth the trouble.
Our members can learn about sustainability business value here.
Interested in a membership with access to the complete range of benefits and 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. But it will probably pay for itself before then. Members also save hours of research and reading time each week by using our filtered and curated library of ESG/sustainability resources covering over 100 sustainability subject areas – updated daily with practical and credible information.
Practical Guidance for Companies, Curated for Clarity.
