When it comes to corporate sustainability, what really matters? It’s a tough question to answer, especially as the diversity and complexity of issues under the umbrella of “sustainability” continues to grow.

 

 

There’s corporate governance, workers’ rights, carbon emissions, waste and much more, and – with government regulations up in the air – it can be exceedingly difficult to predict whether or not a sustainability play will pay off.

 

 

Recently, analysts at investment research firm Sustainalytics put together a list of the 10 unconventional sustainability stories that, they predict, are most likely to impact the finances of major companies this year.

 

 

These stories, compiled in a new report being presented next week, highlight some of the major sustainability factors that could affect corporate bottom lines – and, consequently, the large institutional investors, pension plans and portfolio managers who invest in these companies.

 

 

Here are the 10 most important issues to watch in 2015, according to Sustainalytics, ranging from potentially having a “strongly positive” impact on companies’ long-term finances to a “strongly negative” one.

 

 

Top five good stories

1. Lafarge and Holcim cement sustainability with a merger

Sustainalytics’ report says that the merger of France’s Lafarge and Switzerland’s Holcim – the world’s largest cement manufacturers – “could result in an upgrade of energy and GHG [greenhouse gas] performance and improved positioning in the growing market for sustainable building materials”.

 

 

The report is also optimistic about the success of the merger, which is on track for completion by mid-2015. Unlike some companies involved in “mega-mergers”, Lafarge and Holcim have similar sustainability strategies and that, the report claims, bodes well for a successful integration.

 

 

2. Intel’s progress toward ‘conflict-free’ processors

Intel’s “audacious plan” to completely rid its supply chain conflict minerals – such as from the war-torn Democratic Republic of Congo – by 2016 will make major progress this year, according to Sustainalytics.

 

“Intel is well-positioned to capitalize on consumers’ growing awareness of conflict minerals and any upsurge in demand for so-called ethical electronics,” the report says.

 

 

But profit has nothing to do with the company’s involvement in conflict-free minerals, stresses Intel spokeswoman Christine Dotts.

 

 

Getting involved in this conflict-minerals effort was never motivated by a desire to sell more microprocessors, or even being able to command any kind of price premium for a product that was perceived by consumers to be more ‘conscious minded’,” she told the Guardian.

 

 

“No financial analysis has ever been conducted by us to make the connection between these factors. We initiated this effort simply because it was the right thing to do.”

 

 

Nevertheless, Sustainalytics expects the effort to pay a “reputational dividend”.

 

 

3. Telenor seeks rewards in risky markets

When Norwegian telecom company Telenor launched a new mobile phone service in Myanmar in September, it exposed itself to an array of business risks. As Sustainalytics’ report notes, the region has a history of military rule, data privacy concerns and the threat of corruption.

 

 

Sustainalytics’ analysts argue, however, that the company stands to overcome these challenges because of its track record on environmental, social and governance issues.

 

 

What’s more, Telenor’s move into Myanmar could bring further dividends down the line: if the company succeeds, it could apply the lessons it learns to other emerging markets...

 

 

For more Information, please check: HERE