As evidence mounts that companies with strong environmental management practices also have higher financial performance, a number of mutual fund companies are creating new “Eco-Efficiency” funds. The new funds – which include Storebrand Scudder Environmental Value, Sustainable Performance Group, SBC Eco Performance Portfolio, and Swedbank’s Environmental Fund – have shown dramatic performance gains over their counterparts.
To achieve the most financial benefit, several studies indicate a company must fundamentally rethink its environmental management systems, rather than simply add environmental initiatives onto current systems. Firms which implement systemic measures – such as organizational change initiatives and product redesign – show the most benefit.
Not surprisingly, studies show that it is important for companies to report environmental successes to shareholders to fully benefit.
Resources:
Donald Reed, “Green Shareholder Value, Hype or Hit?” WRI, Sept. 1998.
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Linda Descano & Bradford S. Gentry, “Communicating Environmental Performance to the Capital Markets,” Corporate Environmental Strategy: The Journal of Environmental Leadership, Spring 1998. (See our
Content Partner page, for contact info).
Michael Russo & Paul Fouts, “A Resource-Based Perspective on Corporate environmental Performance & Profitability,” Academy of Management Journal, 40(3), 1997.
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FROM Co-op America’s Connections
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