With publication of the Business Roundtable’s “Statement on the Purpose of a Corporation,” [1] America’s top business and financial leaders now officially support the rapidly evolving ESG/sustainability movement, confirming that environmental, social and corporate governance policies are inextricably linked to business risk, value creation, financial performance and sustainability. [2]

The global push for sustainability has already proven to be a game changer that is altering the behavior of both institutional investors and companies. While investors struggle with the challenge of integrating ESG factors into their investment decisions, companies willing to define a meaningful corporate purpose and exploit the full potential of sustainability reporting can achieve important goals:

• Do a more effective job managing relations with institutional investors and shareholders;
• Reshape corporate reporting to provide a holistic picture of the business and its value drivers;
• Direct shareholders’ attention to the company’s unique characteristics and values;
• Designate company-specific performance metrics linked to business strategy and value creation;
• Reduce investors’ reliance on external one-size-fits-all standards and inappropriate metrics;
• Reduce vulnerability to shareholder activism

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