Idea in Brief
The Problem
Corporate sustainability strategies can reduce costs and generate revenue, but many CFOs still don’t believe they can create value. That makes it hard to unlock the internal financing needed to scale them up.
The Facts
Sustainability strategies can improve financial performance by boosting any of nine “mediating factors”: innovation, operational efficiency, sales and marketing, customer loyalty, risk management, employee relations, supplier relations, media coverage, and stakeholder engagement.
The Solution
Companies can use an analytic approach called the Return on Sustainability Investment (ROSI) method to precisely measure the value created by sustainability strategies through those nine factors. ROSI analyses in the automotive, pharmaceutical, and agricultural industries have revealed hundreds of millions of dollars of sustainability-related savings.
By now most companies have committed to improving their environmental, social, and governance performance. Such sustainability efforts have increasingly become table stakes. And yet many CFOs still see them as a cost rather than a source of value. That makes it hard to unlock the internal financing needed to scale them up.