Sustainable Business Assessment Answers

Sustainable Business in Practice

IntroductionIn present situation business practices are taking responsibilities of economic, social and environmental condition and this business practices called as sustainable business practices. The businesses which involve social and environmental policies are the major factor in their strategy they generally develop sustainable economic standards. Here sustainability includes nature and man-made things that required being recreating and stable for a long duration. The business sees sustainability as a triple-bottom-line reporting system where business interacts with their shareholders. The triple bottom lines involve profit performance, environmental performance and social performance in the buisness (Ldeke-Freund amp Dembek, 2017, p.1668). The aim of evolving sustainable business practices is to develop policies that secure the feasibility of people, profit and planet for a long duration. This essay will explore the topic of sustainable business practice with the help of the newspaper article.

The Newspaper article is To divest or not to divest That is the question and this article is linked to sustainable business practices. The responsible investing is rapidly increasing as well as large number for investors are selecting go green investment options. Like coal and tobacco companies have taken the divestments as the fund manager are pledging for tobacco-free finance. In Australia over 55 per cent of total assets are professionally managed and sensibly invested in the suitable investment options (Samson, Donnet ampDaft, 2017).The key elements of responsible investment sectors are increasing request from the retail and institutional investors for development. Now the investor is considering the environmental, social and governance features before investing. The major challenges of this sector are affecting the growth due to the lack of understanding, lack of guidance and shortage of awareness of public. In present situation the responsible investing is generated through sustainable business practices (Trinks amp Scholtens, 2017, p.193). The responsible investment has improved the investment decision and choices. It also improved the active ownership which involves attending meetings, reviewing supply chain and corporate culture. The investor is actively participating in voting on relevant matters that rise in the business, matter can be related to economic and social conditions. Genuinely the sustainable fund is doing better in the market and collaborating with the companies to accomplish great ESG (economic, social and governance) and giving better investment results. And the sustainable companies are really doing well with the revenue and their share prices are increasing. The global leaders are accountable for the green investment in the business. They gave importance to the environmental and social responsibilities because it is the core and basic factors of responsible investing. The article focus on sustainable or responsible investing and ESG investing as the ECG investing is the part of sustainable investing (Odell, amp Ali, 2016, p. 96). The ESG investing covers all the factors of environment, social and governance performance whereas responsible investing generates attractive profits. The sustainable business practices impacts on society, environmental and business itself on a long term basis. The ESG practises provide a deeper vision to organization performance and also enhance the performance of the organization. Due to the responsible investing the company perform with high sustainability. There are various advantages of responsible investment which are mention below

Personal Values The responsible investment considers the investor personal interest and value. They can enjoy the profit of their own saving. Its investor interest to contribute towards social and environmentally sustainable growth for a long duration.

Economic efficiency In the current situation people are requesting for environmental and socially friendly products. They are even paying high prices for sustainable products. (Amel-Zadeh amp Serafeim, 2018).The government is encouraging this trend like subsidy programmes etc.

Provide competitive profit and limited risk Responsible investing provides a very good return and reduces the risk of investing in the investment options.

Rewarding to ethical companies Responsible investing is rewarding the companies that are working with ethics. The more people start to invest in ethical companies due to which those companies get more rewards. This could lead to significant social and environmental change.

As already know divestment is also the example of responsible investing. It is a method of investing in valuable companies or declines to invest in unethical companies. The divestment is important because the company selling the asset that related to the mining of fossil fuels etc. and affecting the environment change (Vrsmarty et al., 2018, p.523). The divestment reduces the investment of assets which disturb the financial, social and environmental objectives. It effectively targets the major issue like tobacco companies etc. If the investor divests the assets of fossil fuel holding then this fund can become more defamed. And it will encourage investment in those companies who support renewable energy. The divestment concentrate on avoiding the investment which affects the environment while the responsible investment supports the investor to identify the holdings that line up with the companys value to encourage positive change. The term divestment and responsible investment are linked with each other as the divestment and responsible investment allow the company to line up their standards and their goals. The responsible investing approaches combine financial returns with the moral return as well as it can be followed by the investor whose main purpose is financial return (Unruh et al., 2016, p.1) If the investor ignores the ECG factors then it ignores the opportunities and risk. The investment approach focuses on the environmental issue and enhances the performance of the companies. The ECS factors and information are involved in the investment decision-making process to confirm that all factors are responsible for evaluating risk and return. The responsible investment practises on various factors which are mention below

The investor uses and promotes responsible investment in the investment industry.

Observing all the ESG factors risk of the portfolio. For example, evaluating the portfolios carbon footprint.

Inspire the investee company to reveal the information about the ESG factors. ESG factors which may or may not affect them.

The investor uses shareholder voting rights to change organization behaviour.

Collecting the ESG data into qualitative and quantitative analysis.

According to the new article, the engagement or holding the assets is better than divestment. But the divestment is better for those companies which are dealing unethically and impacting on the environment and social life. The engagement is not going to modify the basic nature of the organization. Here, divestment helps the investor to understand the nature of risk given by the unethical companies and inspire to invest in the ethical companies like who use renewable energy and use the effective production methods (Lenferna,2018, p.102). The engagement does not ping any changes and company need to move towards the divestment when the company address the environmental crisis.

The newspaper article emphasis on the responsible investing with the help of ESG factors (environmental, social and governance). Because responsible investing considers the social and environmental effects of an organization and it produces long-lasting financial returns and competitiveness. Responsible investing pings out sustainable business in practices. The article is successful to spread the message of responsible investing to all the organizations. It is also successful to spread the message among the investors and clients that invest in the companies (Van Duuren et al., 2016). The motive of the article is to communicate with the investor to go green with the investment and it also also suggests the divestment which means sell out the assets of the company which impact on the social and environmental surrounding. It showed importance on the ESG investing which support investor and companies to ping their interest to develop an excellent portfolio. ESG investing is rapidly increasing among the investor (Kotsantoni, Pinney, amp Serafeim, 2016). Now the organizations are focusing on the ESG factors to enhance sustainable performance and the company is adopting the best sustainable business in practices.

Conclusion

The essay concludes that in the current situation all kind of business requires sustainable business practices. The business considers environmental and social policies to enhance the business process. In the present condition, the sustainable business is essential because it secures the viability of the people and the planet for a long duration. The essay has included the newspaper article To divest or not to divest That is the question this topic is focusing on the sustainable investment and the divestment of assets. The topic suggests that responsible for investing attract good returns. Responsible investing enhances the responsibility of social and environmental factors. It also involves the ESG investing approach which considers the economic, social and governance factor which the company and individual investor for sustainable investing. The newspaper article supports the engagement of assets instead of divestment but this essay is against the engagement of the assets it supports the divestment. The divestment is also the example of sustainable investing which promotes the sustainable business and sells out the assets of unethical companies. Hence, responsible investing promotes sustainable practices in the organization.

References

Amel-Zadeh, A., amp Serafeim, G. (2018). Why and how investors use ESG information Evidence from a global survey.Financial Analysts Journal,74(3), 87-103.

Lenferna, G. A. (2018). Divestment as climate justice weighing the power of the fossil fuel divestment movement. InClimate Justice and the Economy, 102-127. London Routledge.

Ldeke-Freund, F. ampDembek, K., 2017. Sustainable business model research and practice Emerging field or passing fancy.Journal of Cleaner Production,168.1668-1678.

Odell, J., amp Ali, U. (2016). ESG investing in emerging and frontier markets.Journal of Applied Corporate Finance,28(2), 96-101.

Samson, D., Donnet,T.,ampDaft.,TL . (2017). Management (pp. 1-928). Australia Cengage Learning.

Trinks, P. J., amp Scholtens, B. (2017). The opportunity cost of negative screening in socially responsible investing.Journal of Business Ethics,140(2), 193-208.

Unruh, G., Kiron, D., Kruschwitz, N., Reeves, M., Rubel, H., amp Zum Felde, A. M. (2016). Investing for a sustainable future Investors care more about sustainability than many executives believe.MIT Sloan Management Review,57(4).1-32.

Van Duuren, E., Plantinga, A., amp Scholtens, B. (2016). ESG integration and the investment management process Fundamental investing reinvented.Journal of Business Ethics,138(3), 525-533.

Vrsmarty, C. J., Osuna, V. R., Koehler, D. A., Klop, P., Spengler, J. D., Buonocore, J. J., ... amp Snchez, R. (2018). Scientifically assess impacts of sustainable investments.Science,359(6375), 523-525.

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