Media Release

Sustainability fundamental to business risk

Companies that unify sustainability with core strategy will reap the rewards both in the short and long-term, granting future generations the benefit of this investment, according to the messages resonating this morning at a sustainability panel discussion hosted by the Institute of Chartered Accountants in Australia (the Institute).

Australia holds the top spot for most number of signatories to the United Nations Principles for Responsible Investment, and our local capital markets are increasingly looking for compelling integrated reporting by the business community to show the collaboration between financial and non-financial metrics.

Nearly two-thirds of companies worldwide have already adopted a strategy for corporate sustainability, according to Corporate Sustainability: A Progress Report by KMPG. The Institute’s Manager Sustainability, Geraldine Magarey, says sustainability factors need to be built into core strategy, or companies will risk their long-term viability.

“Global trends are pointing to increased awareness of all things related to sustainability. Often viewed as an ethical or environmental consideration alone, we now see business leaders looking for the business implications in terms of reporting and governance. The challenge is to translate intangibles not yet on the balance sheet,” she says.

Ms Magarey says that capital markets see a sustainability strategy as more than just a ‘tick-the-box’ exercise.

“Companies need to consider their own unique circumstances and develop measurable objectives to ensure they have a sustainable future. Communicating this effectively to the market, to your suppliers and customers, and showing ‘the connect’ between sustainability and financial value are core elements of an integrated report,” she says.

The Institute has launched the latest publication in its Business Briefing Series, 20 issues on building a sustainable business, which was produced in collaboration with KPMG.

“Incorporating sustainability into an organisation’s strategy is not a simple task, but the paper outlines how sustainability factors can be practically embedded into a company’s day-to-day processes,” says Ms Magarey.

Article last Updated 23 November 2011