Goldman Sachs links corporate responsibility to market leaders

The study came out late last week at the UN Global Compact Summit in Geneva - those of us not used to seeing the GS name associated with corporate responsibility took note! Mainstream investors have always been wary of sustainability and sustainability reporting - could it be that we are witnessing the winds of change?

The study's main finding is that companies that are considered leaders in environmental, social and governance (ESG) policies are also leading the pack in stock performance—by an average of 25 percent.

More specifically, in an analysis of more than 120 ESG leaders from five different industries—energy, metals and mining, food and beverage, pharmaceuticals and European media—Goldman found that companies in four of the sectors for which it had published reports (energy, mining and steel, food and beverages, and media) outperformed the MSCI world Index by an average of 25 percent since August 2005. 72 percent of the companies on the list outperformed industry peers.

This is a significant result for those of us trying to convince companies that a commitment to sustainability is indeed rewarding!

Interstingly, the main complaint Goldman researchers had was that disclosure remains an issue, the data is hard to get and is not consistent. Sarah Forrest, head of the research project said "We call on companies, industry groups and regulators to address this challenge."

Look no further, GRI Guidelines are here!