Thursday, July 28, 2011

Sustainability linked to business competitiveness

A new report from Sustainalytics concludes that corporate responsibility performance in the mining sector is linked to business success. The SRI research firm says that a strategic focus on sustainable performance is aligned with mainstream business purpose.

“When an organization’s most significant environmental and social issues are addressed, business value is created,” says the report, the first of three looking at the link between sustainability and business performance in the natural resources sector.

“Sustainability concerns and evolving stakeholder expectations are having a greater impact on the business environment than ever before,” the report states. “The business case is likely to strengthen in coming years, as stakeholder expectations continue to increase.”

Sustainalytics studied the influence of nine environmental and social factors on business competiveness relevant to the mining sector. For example, responsible community relations are particularly important for mining companies operating in emerging markets with weaker regulatory environments and human rights records.

Four areas of sustainability were found to be the most material to mining companies’ financial performance: society and community; employee relations; operations; and climate change.

Sustainalytics notes that some of the strongest linkages identified in its analysis cannot be captured in a simple payback or return on investment calculation. “Links that support reputation are difficult to monetize. Links that mitigate risk are hard to quantify. It is interesting to note that the environmental and social areas that generate the most business value do so through their impact on multiple business drivers. “

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