Focusing on profits alone is no longer enough. CEOs need to consider broader stakeholder considerations around financial value, customer value, people value, and societal value.
All companies’ KPIs should capture the value created for all stakeholders – including traditional measures like revenue and costs, but also brand value, diversity and inclusion, community impact, sustainability and other measures.
From oil and gas companies reassessing alternative-energy investments to auto companies embracing electric vehicles, investors and other stakeholders are influencing company’s ESG-related transaction decisions. At the same time, a rise of ESG-focused activist funds is driving scrutiny of corporate portfolios and ESG narratives, calling out “greenwashing” when they see it.
In 2020, the renewable-energy sector dollar volume in the equity capital markets reached a four-year high of $14.8 billion globally, while the sector hit a record 74 transactions, according to Dealogic.