Corporates Face High Investment Needs as a Top Barrier to Sustainability, Making Access to Capital a Key Enabler

Dear readers,

In this edition, we explore the financial challenges of implementing sustainability initiatives and delve into the strategic use of eco-labels. We'll examine insights from Morgan Stanley’s Sustainable Signals report and provide practical advice for leveraging eco-labels to enhance brand value and market share while balancing costs and benefits.

Morgan Stanley’s Sustainable Signals report for 2024

Morgan Stanley’s Sustainable Signals report for 2024 offers insights into how global companies are approaching sustainability. The report is based on a survey of 303 sustainability decision-makers at companies with over $100 million in annual revenue across North America, Europe, and Asia-Pacific.

Key findings of the report include:

• Sustainability as a Value Creation Opportunity: 85% of companies see sustainability as a value creation opportunity, with this being the primary reason for pursuing sustainability strategies.
• Investment Needs and Access to Capital: High investment needs are a major barrier to implementing sustainability initiatives, making access to capital a crucial enabler. Companies are increasingly looking to align corporate financing with sustainability goals through labeled bonds or loans.
• Climate Change Impact: Over 90% of companies expect climate change to impact their business model by 2050, with a quarter already experiencing its effects.
• Mixed Views on Financial Impact: While companies anticipate rising cost pressures due to sustainability efforts, they also see opportunities for stronger cash flows, higher profitability, and revenue growth in the next five years.
• Sustainability in Business Decisions: Over half of the companies surveyed incorporate sustainability criteria into core business decisions such as capital expenditures, research and development, and mergers and acquisitions.
• Regional Differences: The report highlights regional variations in how companies perceive and approach sustainability, with differences in the perceived value of sustainability, key enablers and barriers, and expectations for the future.

Overall, the report paints a picture of a corporate landscape where sustainability is increasingly recognized as a strategic priority, but where challenges remain in terms of financing and managing the associated costs. Despite these challenges, there is a widespread belief in the potential for sustainability to drive long-term value creation and improve financial performance.

Download the full report

How Companies Are Making Eco-Labels Core to Sustainability Strategy

Eco-labels are increasingly becoming central to companies' sustainability strategies. Businesses use them to maintain market share, secure institutional contracts, and enhance brand value.

?

To leverage eco-labels effectively, business leaders should consider the following:

1. Market Positioning: Eco-labels can enhance brand value and market share by meeting increasing sustainability demands from consumers and B2B partners.
2. Certification Strategy: Select credible certifiers with transparent, scientifically-backed criteria that are widely recognized.
3. Cost-Benefit Analysis: Weigh the costs against potential benefits such as resource efficiency, cost savings, and securing supply chains.
4. Consumer Communication: Address potential consumer confusion through clear communication of what each label signifies.

Implementing a robust eco-label strategy can provide a competitive edge and align with long-term sustainability goals!

?

Counterintuitive Advice for Eco-Labels: Embrace Partial Certification

Business leaders might assume that full certification for all products is necessary. However, embracing partial certification—starting with a select line or product category—can be a strategic move. This approach allows for a manageable implementation, provides valuable insights, and can serve as a test case for broader application. It reduces initial costs and complexities while still showcasing a commitment to sustainability. This gradual adoption can build credibility and consumer trust without overwhelming the organization.

Read the full article

So What?!

To drive long-term value and meet rising sustainability demands, integrate sustainability into core operations and secure financing through labeled bonds to overcome investment barriers. Balance sustainability costs with resource efficiency and clearly communicate the value of sustainable practices. Prioritize credible eco-labels to enhance brand reputation and educate consumers on their significance. These steps will help your organization navigate the financial challenges of sustainability and leverage eco-labels for competitive advantage.

What’s Next? To continue our mission, PricingforthePlanet is organizing the PricingForThePlanet Week in Fall 2024. This event aims to share thought leadership, innovative strategies, and success stories in sustainability. We are looking for sponsors to help make this event a success and drive the future of sustainable business practices. Join us in leading the way towards a more sustainable and profitable future.

Contact us to sponsor the PricingForThePlanet Week

Discover How Sustainability Can Boost Your Competitive Edge: Free Webinar!

Did you miss the 2024 PricingForThePlanet Annual Summit?

Good news! Here is the recap of this special event: Join us for a free webinar where we share pivotal insights from the 2024 PricingForThePlanet Annual Summit. This year, in collaboration with Boston Consulting Group (BCG) , Schneider Electric, @The Pricing Professional Society, and Syncron , we explored how sustainability can be a strategic advantage.

We delve into innovative topics like Shared Value and ROSI (Return on Sustainable Investment), showcasing tools that make sustainability both a practical transformation and a savvy financial move. Expect concrete examples and strategies in action. Plus, don’t miss a special announcement and a unique gift at the end!

Watch the free webinar

[In case you are new] Who are we?

PricingForThePlanet offers a wide range of services designed to help organizations monetize and enhance their sustainability efforts, including informative webinars, presentations, C-suite sessions, basic training, workshops, sprints, market and pricing research studies, and certification programs.*

Until next time, stay inspired!

Best wishes,

Stephan and Fabien

Not yet subscriber?

Be part of the PricingForThePlanet twice-monthly newsletter (Bi-weekly Digest) and spread the word! Don't hesitate to forward this email to your nearest and dearest to amplify our cause.

Join now