The traditional way of measuring value and business performance of a company is changing. For an increasing number of stakeholders, financial statements and balance sheet information just isn’t enough. Emphasis is now on sustainability, especially related to reputational risk and corporate image. A sustainability incident, like discovering child labor in the global supply chain, can be extremely harmful to brand value and thus revenue and profits.
Regardless of how large or how profitable today’s businesses are, they do not stand alone in society. Every decision a business makes affects the surrounding community and stakeholders. Sustainability has become a very sensitive issue for the public. Sustainability incidents such as discovering inhuman work conditions in global operations; unsustainable farming of raw materials or high carbon emissions can significantly harm corporate brand image and value. No CEO wants to find out that a newly selected vendor somewhere in the global supply chain is accused of destroying local living conditions with excessive emissions.
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