Raising the Bar: Sustainable Investing Platform
Business Model & Innovation Factors
The Treasurer supports board accountability, transparency, sensible executive compensation programs, robust shareholder rights, and ethical conduct as key governance factors. The Treasurer advocates for policies and practices in support of these factors.
- Board Accountability
- Board Diversity
- Transparency
- Sensible Executive Compensation Programs
- Robust Shareholder Rights
- Ethical Conduct
Environmental stewardship is a shared responsibility. Furthermore, environmental and climate-related factors may have adverse financial impacts on the Treasurer’s investment portfolio. Accordingly, the Treasurer recognizes that impacts on the environment, whether through the use of nonrenewable natural resources as inputs into energy production or through harmful releases into the environment, are key factors to consider in identifying a company’s value proposition and risk exposures.
- Greenhouse Gas Emissions
- Air Quality, Energy, and Fuel Management
- Water and Waste
- Climate Competence
Social capital factors address the management of relationships with key outside parties, such as customers, local communities, the public, and the government. They may affect investment returns, particularly if companies become involved in controversies that threaten their reputations. Human rights, access and affordability, customer welfare, data security and customer privacy, fair disclosure and labeling, fair marketing and advertising, and community reinvestment are key social capital factors that warrant attention.
- Human Rights
- Consumer Welfare
- Data Security and Consumer Privacy
- Community Relations and Community Reinvestment
Companies that consider their workforce an important asset for delivering long-term value should manage their human capital with the same care and analytical insight they apply to their tangible and financial capital. It includes issues that affect employee productivity, such as employee engagement, diversity, incentives, and compensation, as well as the attraction and retention of employees in highly competitive or constrained markets for specific talent, skills, or education. Employers should respect their workers’ right to organize under collective bargaining agreements and provide a working environment that upholds health and safety standards.
- Labor Relations and Fair Labor Practices
- Recruitment, Development, and Retention
- Diversity and Inclusion
The impact of sustainability issues on innovation and business models, including corporate strategy and other innovations in the production process, is integral to a company’s financial and operating performance. A company’s ability to plan and forecast viable opportunities and risks to its business model is critical to its capacity to create long-term shareholder value.
- Lifecycle Impacts of Products and Services
- Product Quality and Safety
Leadership factors involve the management of issues that are inherent to the business model or common practice in the industry and that are in potential conflict with the interests of broader stakeholder groups (e.g., government, community, customers, and employees), and therefore create a potential liability or, worse, a limitation or removal of a license to operate. This includes compliance, regulatory, and political influence.
- Systemic Risk Management
- Ethical Business Practices
- Regulatory Capture and Political Influence
- Supply Chain Management