Transparency in ESG and the Circular Economy: Capturing Opportunities Through Data

With the increasing demand from investors for ESG conscious investment opportunities, and the potential for significant returns, the need for portfolio construction tools and metrics to analyze and compare investment options took off. Founded in 2009, the Global Impact Investment Network (GIIN),30 for instance, represents a commitment to utilize ES

The data feeds into Arabesque’s asset management firm, which uses artificial intelligence to enhance a rules-based approach to stock selection that integrates ESG metrics with financial and momentum analyses, in order to produce risk-adjusted returns.

The social contract proposed three main responsibilities of businesses, which are still relevant today: providing jobs and economic growth, ensuring fairness with respect to employees and customers, and becoming involved to improve the conditions of the broader community and environment where it operates.

The realization that focusing only on profit-seeking practices had human costs that ultimately hindered corporate efficiency led to a notion of corporate responsibility.

One example of organizational structure that specifically focuses on for profit companies’ commitment to sustainability through a standalone certification is the B Corporation. This class of businesses, across sectors and industries, has committed to the integration of profit and purpose within their strategy. The B Corp certification legally requi

These classification systems offer unique industry-specific financial metrics, which are mapped to the Sustainable Industry Classification System (SICS)26 system. Current industry categories consist of consumer goods, extracts and minerals processing, financials, food and beverage, health care, infrastructure, renewable resources and alternative en

Over the long term, High Sustainability companies were found to significantly outperform Low Sustainability companies, both with respect to stock market performance and accounting measures (e.g., return-on-equity and return-on-assets). It may be concluded that the implementation of sustainability practices, and the ability to institutionalize them

Porter and Kramer discuss several examples of corporations that can analyze their social responsibility opportunities with the same frameworks that guide their core business decisions, and in doing so, have discovered unique market opportunities to capitalize on (e.g., Whole Foods, Toyota, Volvo). These are companies that have integrated ESG concer

The emerging concept of creating shared value (CSV) described in Chapter 1, as a development beyond CSR, is a push to shift CSR practices from being cost centers disconnected from business strategy to becoming a source of profitability through innovation and competitive advantage.

The Committee for Economic Development,2 with its track record since the post-war period of engaging business leadership to confront global issues and shape public policy, published the Social Responsibilities of Business Corporations3 in 1971. It presented the idea of a social contract between business and society, where corporations exist as a re