SUSTAINABILITY is an increasingly important theme for today’s consumers, who want what they wear, eat and even drive to both benefit themselves and have a positive impact on the world around them.
Key factors influencing the way business is done and driving a greater shift toward more sustainable and responsible corporate behavior include:
• Consumer pressure – With individuals increasingly aware of the impact of their decisions, demand for sustainable products is increasing. Companies capable of providing sustainable goods, produced in an ethical manner are well placed.
• Financial sense – Regulations and legislation increase costs for polluting companies, thereby providing significant impetus for efficiency improvements. Companies creating less pollution and those providing pollution reduction and efficiency technologies should continue to prosper.
• Political climate and regulation – The environment and related social impacts are now widely regarded as mainstream political issues with policy decisions increasingly made with sustainability in mind. This political will has a marked effect on regulation, as seen in the banking sector, energy policy and emissions regulation, which in turn affects competitive landscape for businesses. Regulation influences company behaviour and typically favours more sustainable or resilient companies.
Ultimately, investors will do well to seek out well-managed companies that are set to benefit from any or all of these changes, and can profit from swimming with the tide of sustainability.