A Sustainability Lens for Capital Decisions: A Corporate Sustainability Approach to Reduce Business Risk

Publisher
EXCEL Partnership and The Delphi Group
Publication date
October 2005
Type
Reports
Industry
Energy
Transport
Consumer Goods
Category
Sustainability and the Business Case
Environment/Climate Change
Corporate Governance/Accountability
Managing Corporate Responsibility
Discipline
Operations Management
Strategy
Organisational Behaviour
Environmental Management
Language
English
Link
A Sustainability Lens for Capital Decisions: A Corporate Sustainability Approach to Reduce Business Risk
Free/Pay for content
Free
 

The Report considers the following logic to highlight the value of a Sustainability lens to capital decisions, risk areas, and decision making changes:

  1. A Consideration of Risks: Are they increasing, and if so how?
  2. A Consideration of Changes in Corporate Decision Making: Disclosure expectations are  changing, with the impacts of intangibles expected to be reported.
  3. Financial Decisions and Risk: How have they been conducted in the past, and what are the limitations from this approach.
  4. Mega Risks: Environmental Examples Where are mega risks forming and what is their specific relevance to business decision making?: Risk areas covered are: biodiversity, climate change, water, and health and the environment.
  5. Issue Specific—Sector Specific Lines of Inquiry: Examples of risk mitigation lines of enquiry for the four issues areas are introduced, as they pertain to four business sectors: manufacturing, energy, consumer products and transportation.
  6. Management System and Decision Making Changes
    Decision making: The process of making capital allocation decisions, and how it needs to change in light of the relevance of non-financial risks to long term investments. Governance issues, trigger points, and more systematic sustainability criteria need to be considered, and then new approaches need to be applied to investment decisions.
  7. Corporate Functions: how do corporate functions need to change within a company in order to incorporate a wider view of risk? Enhanced consideration of sustainability issues changes the role corporate sustainability, or Environment, Health and Safety groups, along with other functional groups such as finance, should play within their respective companies.
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