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A Sustainability Framework: Societal Shifts as Investment Risks

By Advisor Perspectives
Financial Services

Successful long-term investing depends upon the identification of sustainable companies. We believe traditional investment analysis tends to underestimate some risks faced by companies today. In particular, we see rising risks to sustainability from the potential breakdown of relationships between industries and companies with society. Each company and industry operates under a “societal license” that, if damaged or revoked, can ultimately impact the bottom line. This relationship risk is rising in today’s market and social environment due to several interrelated factors, including evolving consumer values, environmental issues, social media, technological disruption, and lack of reinvestment (see Exhibit).

Read more at Advisor Perspectives.

Photo: Jim Makos

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