copyright © 2007 praxis consulting group, inc. all rights reserved. measuring sustainability’s...
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Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
Measuring Sustainability’s Return on Investment
Ted Freeman, Principal, Praxis Consulting Group
New Hampshire BSR Annual Conference
June 1, 2009
Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
About Praxis
What We Do Who We Serve
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Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
Types of ESG Initiatives
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Community Engagement
Workplace
Operations
Products Services
Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
Measurement
For Benchmarking
For Determining Impact On Workplace On Communities On Environment
For Calculating Value
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Value of ESG
Tangible Savings or revenue minus investment
Intangible Brand equity Customer loyalty Employee commitment “Doing the right thing”
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Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
Tangible Returns
Bruss Construction Satellite tracking of company vehicles
– $36,000 in savings annually
Hypertherm Intensive training program to build technical skills, give
associates college credit– Initial investment: $2,000,000
– Savings in 2008: $2,450,000
Monadnock Paper Hazardous waste reduction, energy conservation, etc.
– $500,000 in savings annually
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Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
Tangible Returns: ROI for Ownership Culture in the Workplace
Employee-owned companies with ownership cultures outperform their counterparts
Kramer, City University of New York
Freeman, University of Pennsylvania
Blasi & Kruse, Rutgers University
Keogh, Kardas, Scharf, Washington State
Hewitt Associates / Kellogg School
ESOP Association Annual Surveys
“Employee Ownership & Corporate Performance”, NCEO lit review
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Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
Intangible Returns
McKinsey Global Survey 66% of CFOs and 75% of investment professionals
agree that ESG initiatives create value for shareholders Maintaining a good corporate reputation or brand equity
is the most important way these programs create value Significant uncertainty about putting a number on the
value Cone Cause Marketing Study
79% would switch brands if associated with a good cause
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Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
Summary
Variety of types of ESG initiatives
Tangible and intangible value
Some of greatest value is hardest to measure Employee ownership Timberland market research
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Copyright © 2007 Praxis Consulting Group, Inc. All rights reserved.
Contact
Edmund B. (Ted) Freeman
Principal, Praxis Consulting Group
917.592.5827 (mobile)
347 463 9350 (office)
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