3P: THE TRIPLE BOTTOM LINE
Looking back, Mr Elkington might be considered godfather to the Environmental, Social and Governance (ESG) focus of many companies today.
ESG criteria are a set of standards used by responsible investors to screen companies.
Social criteria, for example, address how a company manages product liability, supply chain, human rights and communities in which it operates.
Environmental criteria address carbon footprint, access to resources, pollution and waste.
In effect, ESG metrics are a filter for investors to de-risk investment portfolios, drive sustainable growth and focus on the triple bottom line.
ESG IN THE REAL WORLD
Research demonstrates a link between ESG and stronger company performance.
In 2015, research from Oxford University concluded that:
“80% of the reviewed studies demonstrate that prudent sustainability practices have a positive influence on investment performance”.
The same year, Deutsche Bank drilled deeper and analyzed 2,250 academic papers going back to 1970. Deutsche concluded that, in 63% of cases, ESG made a positive contribution to corporate financial performance.
ESG IN A PERIOD OF DECLINE?
In 2015, research from Oxford University In an October 2019 report, The Thinking Ahead Institute concluded that the top 500 Assets Under Management (AUM) decreased for the first time since 2015, with total discretionary AUM down 3% since 2017.
Crucially, in spite of this broader 3% decline in assets under management, there are two clear ESG wins: that:
Assets in ESG mandates rose over 23%.In effect, ESG metrics are a filter for investors to de-risk investment portfolios, drive sustainable growth and focus on the triple bottom line.
Assets managed according to ESG principles increased by almost 18%.
The Thinking Ahead Institute concludes:
“Sustainability has become an unavoidable issue. As the talk on this front turns into action, the leading firms will be the ones who manage to close not only the saying-doing gap, but also the doing-impact gap, which is the shortfall between the desire for a more sustainable economy and the ability to create it.”
In effect, ESG, 3P and the triple bottom line seem to have passed the stress test.
WHAT'S OUR ANGLE?
So how do we at 22i play into this?
We laser-focus on the triple bottom line to mitigate risk, drive efficiencies and social impact.
Our AI, for example, strips out much of the manual cost of safe smart meter installation. In the UK alone, this equates to unnecessary costs of $700 million and 40,000 tonnes of CO2 – every single year.
We don’t just desire a more sustainable economy – we help create it.
For us, the triple bottom line isn’t what we say – it’s what we do.