A Review of the Link Between Sustainability Performance and Company Valuation

This brief from WBCSD can help you to understand how capital markets are starting to reflect sustainability performance in company valuations; the benefits of strong, credible sustainability performance; and the risks of delaying action. It provides insights into the short-term and long-term impacts - including benefits and potential costs - of sustainability initiatives; the risks of the "do-nothing" option; evidence of how sustainability performance influences company valuation and financing conditions; and practical guidance for integrating sustainability into financial and strategy decision-making. The report explains that although initial costs will be required (and will need to be justified), financial markets increasingly reward robust environmentally sustainable practices with higher valuations, lower capital costs, and more investment. It also notes that, overall, more recent studies and surveys suggest that sustainable business strategies enhance corporate resilience and open new financial opportunities.