Sustainability's Investor Impact
Investors are increasingly interested in sustainability, with expectations that is become a core business practice.
In February 2016, Apple launched $1.5 billion in green bonds for renewable energy, energy efficiency, and circular economy projects. In June 2017, Apple issued $1 billion in green bonds. Not long after Apple's first bond issuance, in May 2016, Starbucks issued a $495.6 million sustainability bond.
A 2014 CDP report found that companies considered to be climate change leaders among S&P 500 companies report 18 percent higher return on equity than low-scoring companies and 67 percent higher return on equity than non-responders.
Goldman Sachs now manages $10.5 billion in assets dedicated to environmental, social, and governance (ESG) investments. BlackRock CEO Larry Fink issued a statement to CEOs in 2017 emphasizing the importance of ESG, stating "Without a sense of purpose, no company, either public or private, can achieve its full potential." Barclays offered the first syndicated sustainability-linked revolving credit facilities to a U.S. borrower, allowing the borrower to lower their interest rate by meeting targets related to environmental sustainability.
Sustainability accounting has also evolved. The Sustainability Standards Accounting Board (SASB), the independent standards-setting organization for sustainability accounting standards, was established in 2011. SASB helps meet the needs of investors by fostering high-quality disclosure of sustainability information and data.
Related Blog Posts