Prescription for happy investing

September 7, 2011

Patrick Yves Berger is Head of Environmental, Social And Governance Equity Research at UniCredit. The opinions expressed are his own.

Are you a CEO or a financial professional involved in investing, financing, advising or managing? Feeling down when reading the headlines on how the rest of the society is looking at you? Feeling some fatigue in the morning when looking at those red figures? Getting nauseous when you start thinking where all this might end?

If “yes” to any of the above, try one of the following at least once a week.

Ah yes! And do not worry about the side-effects. All these actions reduce costs, improve profitability and enhance returns in the long-term:

Buy shares in a company like Linde and feel responsible for saving a person from fuel poverty through the company’s 251 MWh/sales reduction in energy intensity.

Expand the operations from a company like Energias de Portugal and feel responsible for saving a polar bear’s calf from drowning through the company’s 254 t/sales reduction in GHG intensity.

Recommend a company like SAP and feel responsible for saving a family’s home from a natural disaster through the company’s 1.6 t/sales reduction in travel related CO2-emissions.

Approve an investment for a company like MAN and feel responsible for saving a child from a fatal disease through the company’s 1.1 t/sales reduction in waste intensity.

Finance a company like Nestle and feel responsible for saving the existence of a native inhabitant through the company’s 99.0 m3/sales reduction in water intensity.

Invest in a company like Royal Bank of Scotland and feel responsible for saving a tree through the company’s 0.1 t/sales reduction in paper intensity.

Loan to a company like RWE and feel responsible for saving a person from an accident through the company’s -0.6 hours/employee reduction in accident severity rate.

Suggest a company like Swiss RE and feel responsible for saving a person from the agony of unemployment through the company’s 2.6 percent reduction in employee turnover.

Lend to a company like Deutsche Telekom and feel responsible for saving the dignity of an older person by the company’s 0.1 percent increase in workforce replacement rate.

Propose a company like Barclays and feel responsible for saving the retirement of a person by the company’s 0.3x increase in pension benefits coverage.

Fund a company like Shell and feel responsible for saving a starving child through the company’s 0.1 percent EBITDA increase in philanthropic contributions.

Support a company like BASF and feel responsible for saving the planet from another environmental disaster through the company’s 0.5 percent decrease in environmental, social and governance provisions.

Chair a company like Intesa Sanpaolo and feel responsible for saving the confidence of stakeholders through the company’s 4.5 percent increase in board independence.

“The argument for including sustainability factors within investment analysis needs to be fought at every investment morning meeting, at every quarterly portfolio review and within every five-yearly-pension fund RFP”, Mike Tyrell, the editor of SRI-CONNECT (a research exchange and network for CSR, IR & SRI professionals) and a consultant with Sustainable Investor, has argued in a blog post on the Great Debate.

I would just add one thing: it needs to be fought in your mind as well.

Figures above are based on UniCredit estimates for companies mentioned as per  November 5, 2010, tracking 2010 year on year changes.

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