Sustainability and money often seem like opposite ends of the pole – sustainability the way to a purer world, money its tainted obstacle. Analysts often struggle to integrate sustainability into investing; but we need money to reach our greener goals. This case provides a tool to integrate sustainability into investment, driving the analyst to view the whole rather than the parts, and to steer funding to sustainable companies without sacrificing return. It is a journey into a company’s true value as opposed to financial tourist highlights and, ultimately, a way of aligning profit with purpose.
Based on published sources; 20 pages.
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1. It offers a tool to integrate sustainability into investment (and credit) analysis by connecting sustainability to strategy, competitive position, business models and value drivers. 2. It highlights the need for fundamental analysis (as opposed to quant and passive investing) to properly assess a company’s preparedness, which we consider the essence of corporate sustainability. A fundamental and integrated approach (i.e. business and sustainability and financials) can build a powerful and convincing case for investment, and so accelerate the transition to a sustainable world. 3. It trains the analyst to develop a holistic view of organisations by integrating the ‘separate’ worlds of financials and sustainability: Its departure point is the connection between these two worlds – business models. Next, it briefly addresses the headline financials, namely the company’s value drivers, before diving into strategy and sustainability. Finally, it goes back to the value drivers and the investment case to see how they have been affected by the sustainability analysis. In this way, the analyst develops the skill of evaluating a company from a broader perspective.
