Sustainability pays' says London Business School Economist
Keynote speaker at the event, sponsored by RBC Wealth Management, Prof. Ioannou challenged what he called the ‘traditional model’ of business that recognises value predominantly through the eyes of the shareholder by detailing an alternative approach he termed the Team Production Model. Identifying the need to shift from a vertical way of doing business with the shareholder as the ‘Supreme Being’, to one that operates horizontally he built an argument that holds corporate sustainability in equal measure with dividend return.
Resting on the four pillars of sustainability, government; stakeholder engagement; decision making time horizons and transparency, Prof. Ioannou traced the positive relationship between Environmental, Social and Governance, (sustainability in business), and long-term financial performance.
Commenting on this point Prof. Ioannou said: ‘Evidence shows that the investment community increasingly recognises and rewards truly sustainable companies. Maintaining investments in sustainability (as well as innovation), especially during times of economic crisis, generates valuable intangible assets that enhance competitiveness in the long-run. This is not about replacing financial measurements with sustainability metrics. Instead the challenge is to integrate them’.
Durrell’s new CEO Dr Lesley Dickie thanked RBC for their commitment to Durrell and hosting this event over the past nine years: “Conservation takes time and would not be possible without long term partners and supporters such as RBC. It is so important in a world that is threatened to show that business and environmental concerns can work together”.
Chris Blampied, Head of Banking at RBC Wealth Management said: ‘It was striking that Prof. Ioannou built an economic case for integrating sustainability into a more traditional, shareholder driven business model. Our new BREEAM rated Gaspé House office in Jersey exemplifies our on-going commitment to placing CSR at the heart of our long-term planning. Coupled with a talk by Glyn Young, Head of Birds at Durrell Wildlife Conservation Trust, highlighting the plight of Jersey’s endangered species; it was a timely reminder that corporations have an important part to play in global, sustainability thinking’.
Click here to download the presentation slides.