Professional Documents
Culture Documents
Number 32,
Summer 2009
Perspectives on
Corporate Finance
and Strategy
2
What next?
Ten questions for
CFOs
19
When to divest
support services
5
Reducing risk in
your manufacturing
footprint
11
Valuing social
responsibility
programs
11
Sheila Bonini,
Timothy M. Koller, and
Philip H. Mirvis
12
financial professionals.
Growth
on growth.
relationship between
environmental, social, and
governance activities and
value creation, we surveyed
238 CFOs, investment
professionals, and finance
executives from a full range of
industries and regions. The
survey was conducted in
conjunction with a survey of
127 corporate social responsibility and sustainability
professionals and selfdescribed socially responsible
institutional investors
that were reached through the
Boston College Center for
Corporate Citizenship. Both
surveys were in the field
in December of 2008. To get
a bottom-up view, we also
constructed case studies of
20 companies with leading
environmental, social, and
governance programs
in a number of industries.
3 See Valuing corporate social
responsibility: McKinsey
Global Survey Results,
mckinseyquarterly.com,
February 2009.
or industry norms.
New products. IBM has also developed green dataHowever, environmental, social, and governance
13
MoF 32 2009
Valuing ESG
Exhibit 1 of 2
Glance: The best environmental, social, and governance programs create financial value for a
company in ways that the market already assesses.
Exhibit title: Quantifiable value
Exhibit 1
Quantifiable value
Growth
Returns
on capital
Risk
management
Management
quality
New markets
New products
Innovation
Reputation/differentiation
Operational efficiency
Workforce efficiency
Reputation/price premium
Regulatory risk
Public support
Supply chain
Risk to reputation
Leadership development
Adaptability
an underpenetrated market.
14
be substantial.
the company to innovate by generating ideas, implementing them, and measuring the results. These
Returns on capital
15
governance issues.
Risk management
water shortages.
16
farmers to consumers.
communities. Environmental, social, and governance programs are one way to boost this kind
Management quality
17
Assessing
MoF 32 2009value
Although
many executives and investors believe
Valuing ESG
that
much
Exhibit
2 ofof2 the impact of environmental, social,
indirectand
nearly impossible to measure
financial effectsthus
on companies.
and
governance
programs
is long
term and
Glance:
Environmental,
social, and
governance
programs can identified
have direct its
andreputation
indirect shortfalls, aligned its busi-
Financial impact
Direct
Indirect
New products
Increased sales
Increased sales
Increased sales
Increased sales
Goodwill
Goodwill
Avoidance of risk
Goodwill
18
governance issues.
The authors wish to thank Nomie Brun, Thomas Herbig, and Michelle Rosenthal for their contributions to
this research.
Sheila Bonini (Sheila_Bonini@McKinsey.com) is a consultant in McKinseys Silicon Valley office, and Tim Koller
(Tim_Koller@McKinsey.com) is a partner in the New York office; Philip Mirvis is a senior research fellow
at Boston Colleges Center for Corporate Citizenship. Copyright 2009 McKinsey & Company. All rights reserved.
This article has been adapted from Valuing corporate social responsibility and sustainability, a white paper published
by the Boston College Center for Corporate Citizenship, March 2009.