Clear Advantage: Building Shareholder Value / Environment: Value to the Investor (EVI)
Clear Advantage: Building Shareholder Value / Environment: Value to the Investor (EVI) was designed to help provide businesses approaches on how to measure, manage and communicate EHS value to the financial community thereby making tangibles out of intangibles. It is designed for senior company executives, including CEOs, CFOs and Investor Relations (IR) professionals, mainstream financial analysts and fund managers and EHS and other company managers. The new tool includes four sections: An Executive Summary of the tool; Making the Case that provides evidence to support the correlation between EHS performance and financial outcomes; A Closer Look that provides ten important EHS-related value drivers and related case studies from GEMI member companies; and From Concept to Practice that provides a methodology for EHS and IR colleagues to apply the new knowledge and engage senior executives
GEMI has produced a series of tools that demonstrate how excellence in EHS can add shareholder value to companies. The GEMI “Value” journey began with Environment: Value to Business (EVTB) published in 1998 and continued with Environment: Value to the Top Line (EVTL) published in 2001. The purpose of Clear Advantage: Building Shareholder Value, GEMI’s latest tool in the series, is to enable businesses to measure, manage and communicate EHS value to the financial community or, in the words of Bob Brady, retired fund manager at Citigroup, to “turn the intangibles into tangibles.” EHS is among the intangible value drivers that are hidden sources of organizational power—from regulatory compliance that prevents liabilities, to proactively managing risk. Leveraging EHS resources can help create additional value for the enterprise through strategy execution, enhancing brand and reputation, boosting innovation and leadership.
This report is a resource and guide containing a variety of data and tools to assist managers in unlocking the value contained in activities they are required to perform but frequently regard as a cost of doing business—rather than as an opportunity to better position the enterprise with customers, investors and lenders, alliance partners and current or prospective employees. Case studies from GEMI members help illustrate these opportunities.
Clear Advantage provides compelling evidence of the link between EHS activities and shareholder value. GEMI created the diagram below, which illustrates the many pathways to shareholder value. Because an enterprise’s EHS function cuts across many areas of business, this report covers the EHS function as well as related organizational activities: community involvement, stakeholder relations, governance, transparency and business continuity. Utilizing the value drivers identified, this report will demonstrate that strengths in EHS can add value to the enterprise. Specifically, this report will show how companies can measure and disclose the strategic contributions of EHS to enhanced market valuation and identify EHS-related indicators that are linked to intangible value drivers. The intended audiences for this tool are senior company executives, including CEOs, CFOs and Investor Relations (IR) professionals; mainstream financial analysts and fund managers; and EHS and other managers. It can also provide members of the socially responsible investment communities with useful data, as well as guidance for EHS executives on how to better advise managements with whom they are engaged.