Creating a Sustainable Organization

Description

“With investors increasingly concerned about whether they have appropriately priced ESG-related fat tail risks in their portfolios, Peter’s book provides a timely explanation as to why financial markets care about how companies manage their material sustainability issues, set performance targets for them, and then embed ESG principles into their core business.”

–Abyd Karmali, Managing Director and Global Head of Carbon Markets, Bank of America Merrill Lynch

“Soyka brings a fresh and grounded view of corporate sustainability that understands the critical need to bridge the environmental and financial worlds. He makes it clear that sustainability is multidisciplinary and that leadership companies align it with core business drivers and metrics. Creating a Sustainable Organization  is a valuable work that should be required for any professional seeking to align sustainability with business success.”

–Joel Makower, Chairman and Executive Editor, GreenBiz Group; author, Strategies for the Green Economy

“In Creating a Sustainable Organization, Peter Soyka has woven together a wealth of personal experience, industry commentary, data, and academic analysis to present a compelling argument in favor of promoting corporate sustainability. But he doesn’t stop there–his primary accomplishment is in establishing a guide for present and future sustainability practitioners to pursue sustainability as an engine for value creation within their firms. Peter has given us insightful–and in some cases, uncomfortable–analysis. Those of us in the business of evaluating companies from the outside have as much to learn from Peter as those on the inside.”

–Mark E. Bateman, President, Segue Point LLC; Director of Research, IW Financial

Sustainability and socially responsible investing (SRI) are each attracting growing attention from financial institutions, nongovernmental organizations (NGOs), private investors, citizens, and policymakers. In Creating a Sustainable Organization, Peter A. Soyka links these trends, showing how to use organizational sustainability to drive greater value for shareholders and other corporate stakeholders.

Soyka employs the powerful construct of Environmental, Social, and Governance (ES&G) posture and performance, showing how it integrates environmental, health, safety, and social issues with governance. You’ll learn how ES&G compares with Corporate Social Responsibility (CSR) and the “triple bottom line,” and how and when to use it to improve (or evaluate) a company’s performance and investment potential.

Environmental, Health, and Safety (EHS) and sustainability professionals will gain a deeper understanding of how the financial community operates, what its members value, what motivates its behavior, and the basis of its growing interest in corporate sustainability. At the same time, investors and investment analysts will develop broader and deeper insight into how sustainability issues affect companies’ performance and prospects, and which sustainability practices create the foundation for long-term value creation.

Covers all this and more:

• How sustainability affects enterprise value: the latest data

• Barriers to corporate sustainability—and how they can be overcome

• The surprising ways key financial players are now promoting sustainability

• Responding to the growing diversity and sophistication of EHS stakeholders

• Managing sustainability more successfully throughout the organization

• Defining, measuring, and reporting on sustainability more effectively

• Tracking sustainability performance from the investor’s viewpoint

• Bridging the viewpoints of EHS and the financial/investment community

• Becoming a more effective and influential EHS/sustainability professional

Peter A. Soyka, President of Soyka & Company, LLC, is a highly experienced and respected sustainability and environmental management consultant. A recognized expert working at the intersection of EHS and finance, he specializes in helping companies identify and overcome the obstacles to sustainable business success.

Soyka brings a substantial track record of innovative thinking and success in devising creative solutions to the most challenging
environmental/business management problems, and in translating new ideas into approaches, tools, and techniques that produce real results. Much of his recent work has involved identifying and capturing the financial and other organizational benefits of proactive environmental management and sustainability practices. 

Organizations that prioritize environmental, health, and safety (EHS) issues are well placed to attract better customers, better talent, and today’s growing number of socially responsible investors. But, to gain these benefits, companies must choose the right sustainability strategies, and then manage and measure them well. Now, leading business sustainability consultant Peter Soyka offers a complete and actionable guide to driving greater value through sustainability. Soyka bridges the disparate worlds of the EHS/sustainability professional and the investor/analyst, covering all this and more: 

• What the evidence says about linkages between sustainability and value
• Key stakeholder relationships influencing corporate behavior related to EHS and social equity
• Best practices for managing sustainability throughout the business
• How sustainability posture and performance can be evaluated by investors, markets, and managers
• How to maximize the influence of organizational actors focused on sustainability

This book will be invaluable for all environmental, health, and safety decision-makers and professionals concerned with improving sustainability and value; for executives and strategists seeking competitive advantage; for analysts evaluating investments; and for researchers and MBA candidates currently studying the techniques and potential of corporate sustainability.

INSTRUCTOR SUPPLEMENTS:  Instructor’s Manual available for download at www.pearsonhighered.com.

• How sustainability impacts today’s enterprise: stakeholders, investor issues, performance management/measurement, and more
• Strengthening links between sustainability and shareholder value — including updated coverage of Socially Responsible Investing (SRI
• For every environmental, health, and safety professional and decision-maker who wants to drive more value from sustainability

Organizations that prioritize environmental, health, and safety (EHS) issues are well placed to attract better customers, better talent, and today’s growing number of socially responsible investors. But, to gain these benefits, companies must choose the right sustainability strategies, and then manage and measure them well. Now, leading business sustainability consultant Peter Soyka offers a complete and actionable guide to driving greater value through sustainability. In Creating a Sustainable Organization, Soyka bridges the disparate worlds of the EHS/sustainability professional and the investor/analyst. Readers will learn what the evidence says about linkages between sustainability and value… how to manage key stakeholder relationships influencing corporate response to EHS and social equity issues… how to effectively manage sustainability throughout the business… how to evaluate sustainability posture and performance from the standpoint of external investors and internal management… how to maximize the influence of organizational actors focused on sustainability, and much more. This book will be invaluable for all environmental, health, and safety decision-makers and professionals concerned with improving sustainability and value; for executives and strategists seeking long-term competitive advantage; for stock analysts evaluating potential investments; and for researchers and MBA candidates currently studying the techniques and potential of corporate sustainability.

Chapter 1 Introduction    1

Major Themes and Messages in This Book     4

A Few Disclosures and Caveats     9

Endnotes     12

Chapter 2 Background and Context     15

What Is Sustainability, and Why Is It Important to Business?     16

Why Sustainability Is and Will Remain Important to U.S. Corporations     22

Where We’ve Been and What We’ve Learned     29

What ESG/Sustainability Investing Is and Why You May Never Have Heard of It     42

Major Factors, Actors, and Trends     44

ES&G Concerns as Key Requirements and Determinants of Long-Term Business Success     47

Implications for Sustainability Professionals and Others Working on Corporate Sustainability Issues     52

Endnotes     54

Chapter 3 ES&G Issues and How They Affect the Business Enterprise    57

Environmental, Health and Safety, and Social Equity Laws and Regulations     57

An Abridged History     58

Corporate ES&G Obligations     70

Legal Liability     80

Stakeholder Expectations and Nonlegal Requirements     82

Costs and Cost Structure     89

Revenue Impacts     93

Organizational Strength and Capability     96

Endnotes     106

Chapter 4 Stakeholder Interests and Influences and the Social License to Operate    109

The Social License to Operate     111

Major Company Stakeholders     115

Typical Stakeholder Involvement in and Influence on Corporate Behavior     129

Endnotes     147

Chapter 5 Managing ES&G Issues Within the Organization    149

Relationships Among and Between EHS, Social, and Governance Issues     150

Effective ES&G Management Structures and Practices     154

Integrating Sustainability into the Company’s “Organizational DNA”     178

Endnotes     185

Chapter 6 Investors and the Power of Markets    187

Market Theory and Underlying Assumptions     188

Who Investors Are and What They Care About     194

Size and Composition of U.S. Capital Markets     197

Disclosure     201

Institutional Investors and Fiduciary Duty     209

Traditional and Emerging Security Evaluation Methods     214

Socially Responsible Investing (SRI) and ES&G Investing     227

ES&G Evaluation and Investing Methods     232

Barriers to ES&G Investing     239

International Situation and Trends     247

Analysts, Rating Agencies, Data Providers, and Other Intermediaries     251

Trends and Potential Game-Changers     254

Summary and Implications     261

Endnotes     263

Chapter 7 The Financial Impact of Effective (or Ineffective) ES&G/Sustainability Management     267

Insights from the Literature     268

Surveys of Corporate and Investor Attitudes and Beliefs     289

Summary and Implications     299

Endnotes     305

Chapter 8 Defining, Measuring, and Reporting ES&G Performance    307

Why Performance Measurement and Reporting Are Crucial     308

ES&G Data, Information, Knowledge, and Insight     308

Major ES&G Data Types and Sources     310

Creating Knowledge and Insight from Corporate and Industry ES&G Information     314

Key Needs and Gaps     321

Sustainability Reporting: Extent of Use     323

Evaluation of Current ES&G Reporting Practices, Limitations, and Trends     327

ES&G Research and Analysis Firms     339

Potential Improvements     351

Endnotes     356

Chapter 9 Making It Happen in Your Organization    359

Creating Sustainable Value for the Enterprise     360

Implications for Sustainability Professionals     369

What It Takes     372

Closing Thoughts     380

Endnotes     380

References    381

Index    393

Additional information