Advancing Long-Termism: A Conversation on Creating Shared Value and Investors

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FSG and the Shared Value Initiative are pleased to convene leading companies and influential asset owners and managers to discuss long-termism, social purpose and shared value, its status with investors and analysts, and what it will take to drive mainstream adoption of shared value as a factor for company valuations.
Join us to shape the future of investment in a discussion featuring thought leaders Mark Kramer (co- founder, FSG and co-author, Creating Shared Value) and George Serafeim (Professor of Business Administration, Harvard Business School and co-author, Corporate Purpose and Financial Performance) that will focus on:

  • Challenges to effectively integrating environmental, social and governance (ESG) factors into company valuations
  • What it will take to drive to a common set of material non-financial metrics to drive long-term value for business and society
  • Distinguishing shared value as a strategy that drives social and economic performance
  • Critical elements of a shared value narrative for investors

Context

Investors increasingly acknowledge that social purpose, sustainability, and ESG criteria are relevant to investment performance. Larry Fink’s 2018 annual letter to CEOs stressed the importance of creating value for society while driving financial performance. Financial managers with more than $60 trillion in assets under management have committed to considering ESG factors by signing the United Nations Principles of Responsible Investing. But the reality facing companies daily in the stock market and quarterly on analyst calls—an unrelenting pressure to deliver short-term shareholder returns by any means necessary—seems entirely at odds with this trend. And activist hedge funds are waiting on the sidelines to disrupt management’s long-term vision and sense of purpose whenever they suspect any near-term weakness. How can companies manage these contradictions and convey to shareholders the economic value of their social impact in a way that shows up in the price of their stock?
A growing body of research is beginning to look beyond simple ESG rankings and Global Reporting Initiative (GRI) reports to study much more closely the causal relationship between social impact and corporate success. The Sustainability Accounting Standards Board (SASB) has identified material ESG indicators by industry, and research shows that companies that perform better on material ESG factors substantially outperform their peers, delivering alpha of anywhere from 3% to 8% annually. Other research shows that companies with a clear social purpose that goes beyond mere public relations also outperform their peers. And the shared value companies that have appeared on the Fortune Magazine Change the World list over the last four years have, on average, materially outperformed the market as a whole.

The concept of creating shared value offers a broader way to link social purpose to competitive strategy, giving investors a framework for aligning social and economic performance. Could shared value enable companies and investors to find a common language that illuminates the relationship between social and economic performance? Can it offer a meaningful way for companies to reflect the value of their social agenda in the price of their shares?

For more details, please contact us.

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