|Green Investing Proves a Winning Strategy|
By Martin de Sa'Pinto
November 13, 2008
Zurich - Companies that seek to reduce their environmental impact or
make workplaces safer can boost their share performance, a study published by
Bank Sarasin & Cie showed on Thursday.
Investing in firms with sustainable business practices, a strategy known as
socially responsible investing or SRI, can yield higher returns than using
strategies that focus only on a company's financial performance, the report
"When companies control their value chain across the production process, this
can translate into better management of the business overall, and ultimately
better financial performance as well," said Sarasin spokesman Harald Melzer.
Firms which devote resources toward improving the sustainability of their
business, for example by cutting their emissions or improving safety at work,
may see their share price outperform that of their rivals, the study found.
"I believe that over the last three to four years sustainability, and in
particular climate change, has become more of a focus for investors," said
Eckhard Plinke, head of sustainability research at private bank Sarasin.
The study was based on Bank Sarasin's sustainability ratings of around 460
European and U.S. companies and it sought to establish whether there was a link
between a company's sustainability and its share performance.
The findings undermine arguments that a focus on sustainability can distract
management and damage a company's financial performance, ultimately depressing
its share price.
The research report was produced by Sarasin with the Center for Corporate
Responsibility and Sustainability at the University of Zurich and the Mannheim,
Germany-based Center for European Economic Research.