09 July 2007

Groundbraking Studies by McKinsey and Goldman Sachs Confirm "Doing Well by Doing Good"

Wow, the Leaders Summit in Geneva last week was full on! Where else in the world does the Coca Cola CEO speak with the Head of Amnesty or Oxfam? Where does the president of a major oil company sit at the same table with the UN High Commissioner on Human Rights?

Imagine over 1000 leaders of companies, NGOs, UN agencies and governments in the General Assembly in the UN in Geneva. Opening by the Secretary General Ban Ki-Moon, followed by business and NGO leaders on the most pressing problems of the world: Climate Change, Water Crisis, Sustainability, Human Rights etc. I am still in information processing mode (my god was this all intense) but here the first highlight.

How often have you heard the catch phrase "Doing well by doing good?" Ever wondered what's really behind it? Two studies released at the biggest UN gathering with business delivered some answers:

1. Goldman Sachs Study
  • One of the world’s leading investment banks analysed companies that are considered leaders in implementing environmental, social and governance (ESG) policies to create sustained competitive advantage.
  • These companies have outperformed the general stock market by 25 per cent since August 2005.
  • In addition, 72 per cent of these companies have outperformed their peers.
  • That's groundbreaking news to see that behaving good pays off financially too! See their full GS Sustain report.

2. McKinsey Study
  • Shows that CSR has grown out of its early stages when it was only considered More than 90 per cent of CEOs are doing more than they did 5 years ago to incorporate environmental, social and governance issues into strategy and operations.
  • 72 per cent of CEOs said that corporate responsibility should be embedded fully into strategy and operations, but only 50 per cent think their firms actually do so.
  • Read the full McKinsey Report
Georg Kell, Executive Head of the Global Compact (great person who I worked for at the Summit, so I am biased) summarizes it nicely: "For an increasing number of business leaders, corporate responsibility is no longer an option, it is a necessity in order to compete successfully. At the same time, in order to fully maximize these benefits and increase their competitive advantage in the global marketplace, companies must adopt a broader and deeper approach with respect to implementation of corporate responsibility principles”.

Also check out the official Summit Blog full of great content!