Sustainability - The Most Important Theme for 2020 - Thematic Research

Sustainability - The Most Important Theme for 2020 - Thematic Research

Summary

Yesterday’s business leaders focused on beating quarterly profit targets. Tomorrow’s successful business leaders will focus on sustainable profits. Public anger at the lack of action on climate change, corruption, income inequality, tax avoidance, and other social ills makes it harder for CEOs to ignore sustainability. The public is, after all, a company’s customer base. The reluctance of many CEOs to fully engage with sustainability can be attributed to the age-old view that it will hurt profits. However, according to GlobalData's research, companies that embrace all three elements of sustainability will outperform their peers. CEOs that are too slow to improve their company’s approach to sustainability will see an exodus of customers and a drop in profits far sooner than they ever imagined.

Key Highlights

- In 1970, economist Milton Friedman proposed that the best way that businesses could help society was to focus entirely on maximizing profits. He suggested that successful companies created wealth that trickled down through society, benefitting everyone. The doctrine caught on, particularly in the 1980s, when politicians and CEOs began to follow the mantra slavishly.
- However, The financial crisis of 2007 cast a shadow over the free market doctrine that had previously governed the corporate world. The public began to question profiteering by big business and put pressure on regulators to tighten controls. At the same time, the consequences of climate change have become more apparent, leading many to demand companies are more transparent about their environmental impact.

Scope

- This report provides an overview of sustainability, the most important theme for 2020.
- It includes a comprehensive sustainability framework, covering environment, social and governence factors, to help CEOs identify all potential sustainability risks and implement mitigating actions that can improve their company’s ESG performance.
- It highlights some of the leading ESG rating agencies and ESG consultancies that can help CEOs measure and improve their ESG performance.

Reasons to Buy

- In 2020, sustainability will be the most important theme discussed in corporate boardrooms worldwide.
- Over the coming decade, it will transform the way that business is conducted.
- Customers, voters, and politicians will demand greater action is taken on environmental, social, and governance issues.
- Companies that take sustainability seriously now will be better placed to succeed in the future.
- This reports sets out a framework for sustainability that CEOs can use to identify their sustainability risks and understand mitigating actions that can improve their sustainability performance.