Every generation of business introduces new winners, losers and new ways in which the future will unfold. An age in which climate change becomes a dominant pressure on the ways in which the affairs of the world are conducted will surely be no different.
What Accelerated Sustainability wants to know, however, is what the effect of climate change and companies’ innovation responses to it will be on company valuations.
As its education grows and, driven by commentators in the media new and old alike, the public mood changes towards many businesses of the current school, it is likely the market will come to perceive business risk in new ways.
So, what capacities will investors be looking for in the companies in which they invest, and how will those capacities be best assessed and value attached?
Few investors, we’d guess, are likely to put money into organisations whose operations are seen to be at increasing odds with public expectation. The longer term share-price trend for such companies must only be downwards unless they change their ways.
Yet the compliance and risk reduction mentality of most present-day listed companies, as determined by behaviours measured against the Dunphy scale, is unlikely to provide such organisations with the share-price cover they might hope for.
Just quickly summing up, compliance and risk reduction, as you can find here is the stage on the Dunphy scale of strategic sustainability at which a company does little more than is strictly necessary to ward off regulators and appease shareholders.
True, at this point on the scale there may be gains for shareholders and the community in their actions on improved waste and energy management, for example.
But in such companies, strategic sustainability is not a guiding philosophy and its management may be more often seen as a cost than an opportunity for innovation and organisational betterment. They almost certainly don’t use it as a tool to engage, motivate or reward their workers.
This is the stage of sustainability development at which, for example, we find department store retailer David Jones.
There is little doubt that given the internet’s enabling capacities for widely dispersed groups to self-organise there is coming is a sustained attack on the ways in which many old-school businesses presently conduct their affairs.
It needs a focus and leaders, but there is no doubt it will find them.
This blog has an interest in the ways in which this will play out.
Climate change will demand new responses from companies keen to win customers and build reputation. Using the Accelerated Sustainability method, we aim to play our role in the responses of many to demands for sustained innovation that can support those aims.
Actually, we’re more ambitious: we’d like for our methods to help inspire a national response driven by a collective need to act. But more of that later.
Our guess is that investors are much less likely to wish to invest in companies seen not to be acting on climate change than in those that are.
That willingness will be driven by the quality of the responses of individual companies and the ways in which those actions are perceived by the market.
Our hope is that a race will now be on to be seen to be working on those strategies.
Being seen to act is important.
Our guess would be that systems of managing and developing a company’s human capital with a specific focus on environmental stewardship will be key; likewise the ways in which those companies are gearing up to design viable systems of future innovation in their products and services.
But the better question for now might be, what will the market value?
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