Exhibit 5. Sustainability Efforts Could Influence All the Levers That
Companies Use to Create Value
Value creation
levers
The potential impact
of sustainability efforts
Margin
improvement
Profits
Total
shareholder
return
• A stronger brand and greater pricing
power
• Enhanced ability to attract, retain, and
motivate employees
• Greater employee productivity
• Greater operational efficiencies
• More efficient use of resources
• Supply chain optimization
• Lower costs and taxes
• Improved customer loyalty; lower
rate of churn
Pricing power
Cost savings
Employee
recruitment and
engagement
Market share
Revenue
growth
Free cash
flow
New market
entry
• Enhanced ability to enter new markets
• More potential sources of revenue
• Lower market, balance-sheet, and
operational risks
• Lower cost of capital
• Greater access to capital, financing,
and insurance
Risk premiums
Sources: The Sustainability Initiative 2009 Survey, BCG and MIT Sloan Management Review; interviews with thought leaders.
Valuation
multiple
