Response-to-Reading Assignment

Answer

1. Corporate Sustainable Investments.

               In their report, Wilkinson et al. described sustainability as advancements that satisfy current demands without jeopardizing the ability of future generations to satisfy their own needs. Sustainability encompasses three major pillars; social, economic, and environmental (Purvis et al. 681). This paper aims to compare and contrast two reports, one done by Gregory et al. and the other done by Stuart and Mark. These two reports extensively discuss corporate sustainable investing and practices for investors and investment corporates.

               In comparison, both texts emphasize that there is a need for sustainable investment that ensures a sustainable growth. Stuart and Mark highlight that globally there are challenges that affect sustainability, these challenges can aid in coming up with policies and techniques that lead to a sustainable world while also driving investor confidence (57). Gregory et al. reported that investment companies focused on sustainability are increasingly growing popular, with assets worth a lot more (3). Further, both reports also agree that when it comes to investors and investments, corporate leadership will frequently focus on business models and actions in one way instead of another based on their knowledge of investor preferences. “Perhaps most important, sustainability strategies where business models change are the most likely to generate profit.” (Gregory et al. 14) Stuart and Mark showed that each corporate manager should analyze each change and opportunities according to each driver of sustainable development to ensure that there is value for shareholder investment (59)

   In addition, both reports go on to illustrate those sustainable corporate practices when applied in time, reduce the number of risks involved in investments and the long run ensure there is growth for the corporate firm and relevancy in the market. Good sustainability practices also ensure that there is no loss in terms of investors to better-managed corporates.  Stuart and Mark reported that “such strategies and practices hold the potential to reduce cost and risk; enhance reputation and legitimacy; accelerate innovation and repositioning; and crystallize growth path and trajectory—all of which are crucial to the creation of shareholder value.” (64) Gregory et al. continued to report that investors are beginning to look out for, and develop their own narrative about organizational sustainable performance (3). It is also key to note that both reports make recommendations for sustainable growth in terms of investment.

               In contrast, while Gregory et al. (3) identified that there are three key sustainable related fields that investors are now looking at; environmental, social, and governance, Stuart and Mark reported that there are four key pillars that drive sustainability globally. These four pillars are; rising industrialization, with its inherent production cost, waste creation, and pollution, increase and relations of societal civil stakeholders where Stuart and Mark “Sustainable development thus challenges firms to operate in a transparent, responsive manner due to a very well-informed, active stakeholder base” (59), emerging technologies and lastly increase in population and the gap between the rich and the poor. It is also important to note that while Stuart and Mark researched sustainability in a number of industries, Gregory et al. have extensively conducted their research through surveys done, “…smaller subsample of 3,057 respondents from commercial enterprises. Within this commercial sample, 579 survey respondents self-identified as investors:” (4). The research also included interviews with managers and investors.

   Further, in terms of recommendations for sustainable investment development, Stuart and Mark highlight that addressing the full scope of sustainability challenges can aid in the creation of investment value (65). Gregory et al. (15) on the other hand extensively recommended that corporates should engage their shareholders and investors in sustainability strategy planning, “formulate a strategy once tangible sustainability measures are established” (15), the firm could also incorporate the sustainability strategy in the company’s corporate strategy.

               In conclusion, both texts report that there are three major pillars to sustainability. These pillars are broadly categorized as environmental, social, and economic pillars. As has been discussed above, corporate sustainable investment is key for corporates today because today’s investors are looking into sustainable investments. This, therefore, means that it is paramount for corporate firms and investment firms to look into sustainable business models to ensure that their business remains relevant in an ever-changing world. It would also ensure that investors have their investment options relevant to them and their needs. Corporate firms need to change their business models to ensure that there is the incorporation of sustainability strategies to cater to the growing demand for corporate sustainable investing. There is also a need to identify, build awareness, and analyze sustainability challenges in a firm, and to subsequently formulate strategies, with the help of investors and shareholders. These strategies are supposed to be measurable and attainable.