A new report from ethical investment specialist Ecclesiastical Investment Management (EIM) looks back 125 years to identify the attributes of sustainable businesses and examines how business strategies should evolve to meet the challenges of the next 125 years.
In 1887, when Ecclesiastical was founded, the UK was looking forward to celebrating the Golden Jubilee of Queen Victoria, and this year, the UK marks Queen Elizabeth’s Diamond Jubilee. In those 125 years, the business and societal landscape has evolved beyond recognition. But in spite of all these changes and developments, the factors which make a sustainable business survive have remained constant.
Companies that have been around since the 1800s, such as Coca-Cola, Marks & Spencer and Halfords, have survived into the 21st century because they provide goods and services that people want day after day. They have also evolved and adapted to changing times, exploiting the improvements in transportation and maintaining price competitiveness.
But, as EIM’s report examines, sustainability as the 21st century progresses will be as much about resource management as price competitiveness. The growing pressure on natural resources has meant that businesses are required to be increasingly nimble and also consider the impact of their operations on communities, the environment and on the wider society. Several key players have already embedded such practices within their business:
• Tesco has committed to a zero waste to landfill promise and carbon neutrality by 2050
• Unilever is seeking to improve the lives of 1 billion people with waterless shampoos and the re-engineering of detergents and soaps to use less water
In 125 years, Ecclesiastical Investment Management has transformed from the Ecclesiastical Buildings Fire Office to a major insurance and financial services group with a unique heritage and ownership structure. A focus on profit with principles and making a difference to local communities has given Ecclesiastical as a business an enviable sustainable longevity.
Similarly, investing has come a long way in 125 years with a new focus on addressing some of the world’s most compelling societal problems while making a financial return. Visionaries established the first dedicated UK ethical fund in 1984, although at the time it was thought so bizarre it was labelled the ‘Brazil Fund’ because anyone would have to be ‘nuts’ to invest in it. Despite this initial hesitation, today there are over 80 dedicated ethical and responsible investment funds in the UK totalling over £11 billion assets under management.
Neville White, Social Responsible Investment Analyst at Ecclesiastical Investment Management, commented: “The UN Secretary General recently remarked that the greatest contribution by business is the integration of environmental, social and governance issues into their strategies and operations. The best companies – those that have learned how to evolve and adapt over 125 years - are already making that leap. We believe increasingly investors will come to see the value of these businesses that can manage all of their risks nimbly and astutely as the world grapples with the challenges of a rising population with water, energy and food shortages.
“Socially responsible investing can create sustainable long term wealth for all stakeholders. We need to learn to appreciate that doing business better will ultimately make for better business. Responsible investment is no longer a niche, it makes good business sense. By acting today, we can influence the world tomorrow and can positively impact on the next 125 years.”
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