What do companies think about sustainability?

This week we want to share some thoughts from a recently published report by Morgan Stanley’s Institute for Sustainable Investing where they surveyed 300 private and public companies with more than $100 million in revenue, across a broad range of industries and split equally among North America, Europe and Asia.

There are many interesting things in the report, but we want to focus on 3 ideas:

1. “When asked how sustainability impacts long-term corporate strategy, 85% say it is primarily (53%) or partly (32%) a value creation opportunity.”                                                                                                By integrating sustainable practices, companies can reduce operational costs through energy efficiency, waste reduction, and resource optimization, among other things. This also enhances brand reputation, attracting environmentally conscious consumers and investors. Sustainable innovation can open new markets and drive growth by meeting the increasing demand for eco-friendly products and services. Even companies in traditionally non green sectors, such as energy, are recognizing the value of sustainability. If you still think sustainability is merely a compliance issue, whether with regulators or investors’ expectations, you might already be late to the game.

2. “More than 90% expect climate change to impact their business model by 2050, and almost a quarter have already seen its effects on their business.”                                                                          The impact of climate change on companies across industries is becoming increasingly visible, manifesting in disrupted supply chains, uncertain resource availability, and heightened operational risks. Extreme weather events, such as hurricanes, floods, and wildfires, are causing significant damage to infrastructure and assets, leading to substantial financial losses. In agriculture, changing weather patterns are affecting crop yields and quality, while in manufacturing, water shortages and energy supply disruptions are hindering production. As a result, companies that fail to address climate change are facing escalating costs and competitive disadvantages. Interestingly, in Morgan Stanley’s survey, private companies were more likely to recognize current impacts from climate change than publicly listed companies.

3. “Just over one third agreed that their company’s board has sustainability expertise.”                  Having a board of directors with sustainability expertise is quite relevant today. Directors with a good understanding of these issues can better identify and mitigate risks associated with them. Moreover, a sustainability-savvy board can find new business opportunities, attracting customers who prioritize responsible business practices. Ultimately, such expertise ensures that sustainability is not an afterthought but a central component of the company’s vision and operations.

Sustainability has become better understood by companies as stakeholders increasingly demand responsible and ethical business practices. Businesses are integrating sustainable strategies to enhance operational efficiency, innovate, and maintain competitive advantage. As climate change concerns intensify and global sustainability goals become more ambitious, this trend will only grow stronger. Future advancements in technology and heightened collaboration across industries will further embed sustainability into the corporate ethos, making it a fundamental aspect of business strategy and operations worldwide.

I hope you found this interesting. As usual, if there is anything we can help you with, or if there is an ESG topic you would like to know more about, please let us know.

Best,

Marimar

CEO, Miranda ESG