Sustainability: business, life, environment

In today’s increasingly positive business environment, companies are seeking to increase their spending and have higher expectations for more immediate return on their investments.  Specifically, executives and their business stakeholders want to know: will I get the value from my capital program? 

Reflected in many analyst reports and year end summaries, the corporate world is about to witness one of the largest shifts in capital spending in the history of the modern business.  As the economy emerges from its economic slumber, companies are ramping up to spend record amounts of cash.  With many potential pitfalls looming, are executives considering long-term business sustainability criteria in their actions?

To make the right moves in what is sure to be an investment ‘gold-rush’, our sustainability consulting advises executives to establish a business sustainability framework to ensure cash allocation decisions leverage the past and are focused on the long-term future.  Some common points of consideration include:

•    Define, communicate and implement a consistent ‘sustainability’ risk tolerance into capital deployment.

•    Evaluate long-term flexibility and business sustainability ahead of short-term investor return.

•    Tie cash decisions back to a business sustainability strategy.

•    Integrate stakeholder feedback into capital planning.

•    Communicate the capital plan clearly to investors and key business stakeholders.

The surge in capital spending will not be coming from a clean slate.  The challenges and learnings of the past will ultimately shape the future, thus sustainable business practices will be essential to today’s financial decision making.