Abstract

Sustainability: Advantaged or Disadvantaged? Do organisations that deliver value to all stakeholders produce superior financial performance?


Michael J. King, PricewaterhouseCoopers, UK
Corporate organisations play a critical role in today's society. The dominance of market-based liberal democracy and the globalisation of the world economy means that 48 of the 100 largest economies in the world are companies. There has long been a debate about the role of business: whether it exists only to make profit or whether it has wider goals and responsibilities. If organisations are required to respond to wider expectations, then they will potentially have to be able to deliver across a variety of objectives for different stakeholders. From one viewpoint, business exists only to make profit and if it loses this singular focus it will be disadvantaged and suffer from the processes of competition. This study investigates whether organisations that respond to wider objectives and expectations are disadvantaged in terms of their financial performance. The study finds that companies can deliver across multiple objectives. Indeed, aggregate performance of the 'sustainable' companies is better than their peers and relevant market indices over a five-year period.
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