Sustainable Investment: Does the Buck Stop Here?

As many business and entrepreneurs seek to rebound in the New Year, some basic questions and concerns still loom. The tightened criteria for financing and business investment continue to weigh heavy on executives in the coming year’s planning.   Adding to the economic concerns, sustainability risk is now becoming a real conversation and factor of comparison for investors.

For many looking for venture capital to start a new business or simply expand in anticipation of recovery, eager businesses may find some unfamiliar questions coming from investors.   Our sustainability consulting is examining the state of investment expectations and the increasing interest in business sustainability risks.

A recent GreenBiz article, How Socially Responsible Investors View Companies in 2010, examines the changing business investment criteria going into 2010. Most of these may not have even made the list just a few years ago. However, our professional consulting experience has shown that going forward - demonstrated eco awareness and a plan to address environmental and social risk will positively impact availability to cash.

According to one investment firm, executive leadership is the best indicator of investment potential. Combing strong leadership with a commitment and plan to address business sustainability risk could prove to a winning combination. Looking forward into the coming years, our business resources indicate that visibility and mitigation of environmental and social risks will play a bigger role in investment. We find businesses addressing:

•    Market risks as consumer markets shift
•    Political risk as global policy and domestic legislation take shape
•    Operational risk as commodity and energy prices begin to increase
•    Supply chain risk as misaligned suppliers begin to feel business sustainability pressures

At Taiga Company, our small business resources work with business leaders to define the unique links between sustainability concepts and business value drivers. We provide information and professional consulting services which assist company leadership to build a strong financial case for business sustainability.