How can you create a sense of urgency for sustainable change among investors?
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Sustainability is not only a moral imperative, but also a strategic advantage for businesses that want to thrive in the long term. However, convincing investors to support sustainable initiatives can be challenging, especially when they are focused on short-term returns and risks. How can you create a sense of urgency for sustainable change among investors? Here are some tips to help you communicate the value and necessity of sustainability to your stakeholders.
The first step is to show investors how sustainability can improve your business performance, competitiveness, and resilience. You can use examples of how sustainability can reduce costs, increase revenues, enhance reputation, attract talent, foster innovation, and mitigate risks. You can also highlight how sustainability can create new opportunities for growth, differentiation, and value creation in your industry and market.
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Tahmina Day, MBA, CERP
Head of ESG | Risk Strategist | Sustainability Visionary | Board Member | Speaker
Speak the language of investors by framing sustainability as a strategic asset for business success. Demonstrate to investors how embracing sustainability initiatives can accelerate their path to achieving their financial objectives. But it's not just about financial gain, it's also about risk management and cost reduction. Sustainability isn't charity. It's a shrewd investment. By integrating sustainability into an investment portfolio, investors are not only advancing a more sustainable world but also fast-tracking their financial success.
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Shakeel Jeeroburkan ACSI
LinkedIn Creator | Asset Management Operations | Associate Member, Chartered Institute for Securities & Investment [DISCLAIMER] Views & opinions are my own, not my employer’s & shouldn’t be taken as investment advice
Emphasising the long term value of sustainability, it's important to demonstrate to investors how it can serve as a hedge against future regulatory and environmental risks. With increasing global attention on climate change and environmental degradation, governments worldwide are likely to impose stricter regulations on unsustainable practices. By adopting sustainable methods now, businesses can future-proof themselves against these impending changes, reducing the risk of costly compliance issues and penalties in the future. This proactive positions a business as a forward-thinking leader in its sector.
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The second step is to address the potential barriers that investors may have to support sustainability. You can anticipate and respond to their concerns, such as the upfront costs, the payback period, the uncertainty, the complexity, and the trade-offs involved in sustainability. You can also provide evidence and data to back up your claims, such as benchmarks, best practices, case studies, and metrics. You can also leverage third-party sources, such as ratings, standards, and frameworks, to validate your sustainability performance and goals.
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Matthew Sekol
Global ESG and Sustainability Advisor at Microsoft | Public Speaker and Writer | Benevolent Troublemaker
With any company movement, there will be trade-offs that the management team and investors need to be wary of. Both parties must lead with the business value of sustainability, where ESG intersects to deliver long-term value, to overcome these barriers. For example, a bank may be approached by a stakeholder about their water management. While the bank might implement water conservation in its branches, this is not a material issue, nor does the bank have influence over local watersheds with any meaning. However, a hotel chain with water conservation can influence local watersheds and needs to be cognizant of its approach to this topic as it can help lead to long-term resilience for the hotel. A material approach overcomes barriers.
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Shakeel Jeeroburkan ACSI
LinkedIn Creator | Asset Management Operations | Associate Member, Chartered Institute for Securities & Investment [DISCLAIMER] Views & opinions are my own, not my employer’s & shouldn’t be taken as investment advice
It's essential to underscore the evolving consumer preferences towards sustainability. Today's market shows a growing trend of consumers favouring environmentally friendly and socially responsible products and services. By highlighting this shift, businesses can illustrate to investors that sustainable practices are a strategic choice. Aligning with these consumer values can open up new markets and customer bases, offsetting any initial investment costs in sustainable practices. It's a compelling argument that sustainability is not just a cost but an investment in future market relevance and customer loyalty.
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The third step is to inspire investors with a compelling vision of what sustainability can achieve for your business and society. You can use storytelling, imagery, and emotion to convey the positive impact and outcomes of sustainability. You can also appeal to the values and interests of your investors, such as their personal, professional, or social motivations. You can also invite them to co-create and collaborate on sustainability solutions, such as by soliciting their feedback, input, and ideas.
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Matthew Sekol
Global ESG and Sustainability Advisor at Microsoft | Public Speaker and Writer | Benevolent Troublemaker
Inspiration is great, but find the story (and intersection) with sustainability and your company. This allows you to forge a story that only YOUR unique company can sell. Right now, everyone has targets and goals, but by working at this intersection, you'll be able to differentiate yourself in the market and with investors, potentially even gaining support for the projects.
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Shakeel Jeeroburkan ACSI
LinkedIn Creator | Asset Management Operations | Associate Member, Chartered Institute for Securities & Investment [DISCLAIMER] Views & opinions are my own, not my employer’s & shouldn’t be taken as investment advice
Inspiring the vision involves painting a picture of the broader societal impact that sustainable practices can achieve. Beyond the direct benefits to the business, it's vital to highlight how embracing sustainability contributes to a larger, global effort against issues like climate change, resource depletion, and social inequality. This approach resonates with the growing awareness and concern among investors about their role in shaping a better world. By linking sustainable practices to these global challenges, businesses can tap into a deeper sense of purpose and responsibility, inspiring investors to support initiatives that align with this broader, impactful vision.
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The final step is to create a sense of urgency for sustainability among your investors. You can do this by emphasizing the need and the opportunity for action, as well as the consequences and the risks of inaction. You can use facts, figures, and trends to illustrate the current and future challenges and opportunities that sustainability presents for your business and industry. You can also use calls to action, incentives, and deadlines to motivate and mobilize your investors to support sustainability.
By following these steps, you can create a sense of urgency for sustainable change among investors. You can also build trust, rapport, and alignment with your stakeholders, and foster a culture of sustainability in your business.
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Matthew Sekol
Global ESG and Sustainability Advisor at Microsoft | Public Speaker and Writer | Benevolent Troublemaker
In order to create urgency, you do need data to back up your story. Digital Transformation and data modernization are critical in this step. The process of working through disclosures and regulatory compliance is a good starting point to understand your data. From here, circle back to fill in the estimated gaps with actuals and modernize your data estate. Many companies have built non-financial and financial data systems organically over time, leading to artificial siloes. Break down these walls in order to provide the management team with relevant and connected data points to share with investors.
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Gokul Shekar
TEDx Speaker | Public Speaker | Author | Climate Change Advocate | Sustainability | Renewable Energy | ESG | Carbon Neutrality | Carbon Credit Projects | Carbon Credit Partnerships
In the final step, instill a compelling sense of urgency in your investors by highlighting the imperative and opportunity for immediate action, while underscoring the potential consequences and risks of inaction. Employ compelling facts, figures, and industry trends to illustrate the pressing challenges and opportunities that sustainability presents to your business. Utilize clear calls to action, incentives, and well-defined deadlines to motivate and mobilize your investors to actively support and prioritize sustainability, driving positive change for the business and the broader environment.
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Gokul Shekar
TEDx Speaker | Public Speaker | Author | Climate Change Advocate | Sustainability | Renewable Energy | ESG | Carbon Neutrality | Carbon Credit Projects | Carbon Credit Partnerships
Partnerships and Collaborations: Consider showcasing successful partnerships or collaborations with other businesses or organizations that have accelerated your sustainability efforts. This can demonstrate a proactive approach and the collective power of sustainability initiatives. Adaptability and Resilience: Emphasize how sustainability can enhance a business's ability to adapt to changing market conditions, regulatory environments, and global challenges, making it more resilient in the face of uncertainty. Global Perspective: Discuss how sustainability aligns with global goals and challenges, such as the United Nations Sustainable Development Goals (SDGs), and how your business is contributing to a more sustainable and equitable world.