For many years there have been ultimately inconclusive attempts to prove that improved ESG (Environmental, Social, Governance) performance (frequently referred to as Corporate (Social) Responsibility [CSR] performance or, in brief, Corporate Social Performance (CSP)) affects overall business performance.
This report argues that a more fruitful approach is to identify how improved ESG performance can improve individual elements of non-financial performance, and thereby, create future value. Specifically the report proposes that value is redefined in terms of ‘sustainable value’. A ‘value creation’ framework is proposed.
This Value Creation Framework – and an operationalised management version of it, developed by the EU CSR Alliance laboratory – can be used both by business itself to help embed a commitment to Corporate Responsibility and Sustainability; and by the investment community to refine their business valuation models. It should stimulate further dialogue between companies and investors. Growing sustainability pressures worldwide are likely to make these arguments even sharper in future.
Links:
[1] http://www.investorvalue.org/docs/EabisProjectFinal.pdf