Brookings Institution / by George Serafeim
When a company focuses on improving its environmental or social good performance, what happens to that company’s financial performance and shareholder returns? Harvard Business School professor George Serafeim answers this question with new research that reveals that companies that undertake true sustainable efforts outperform competitors who don’t. Investing $1 in 1993 grows to $28 in 2013 by investing in a portfolio of firms with good performance on material sustainability issues, Serafeim finds. In contrast, investing in a portfolio of firms with poor performance on material sustainability issues would return just over $14 during the same time period.