There has been a growing trend among mutual funds to take a more pro-active stance in investing in companies that, in addition to being profitable, also benefit the greater good of society in some way. As a recruiter, and based on my professional experience, companies that have strong sustainability programs attract top talent. These green programs help demonstrate corporate values to candidates – a critical criteria factor for candidates today, especially with the millennial generation.
For many years that has solely focused on using environmental, social and governance criteria, or “ESG”, to help guide investments. While ESG criteria tends to be black and white – either a company is a steward of ESG or they are not – the process seems to have reversed.
The Wall Street Journal has found that mutual funds are looking at companies they are interested in investing in, and then lobbying executives for change so that the funds can invest in those companies. And corporations are listening, as well they should – there is a lot of money at stake. According to the U.S. SIF, The Forum for Sustainable and Responsible Investment, institutions had $4 trillion in assets invested under ESG criteria, up from $2.5 trillion in 2012. And the trend is continuing as
Morningstar reported last year. Twenty-four funds meeting specific social responsibility criteria were started in 2015. Publicly-traded direct selling companies understand the importance of this evolving investment interest.
Some of the industry’s largest companies have robust sustainability programs:
Mary Kay received the 2015 Promise to the Earth Award from the Arbor Day Foundation for its commitment to tree planting, conservation and sustainability program.
Avon raised over $7 million in donations from 2010-2014 for it’s Healthy Forests, Beautiful World campaign, benefiting The Nature Conservancy and World Wildlife Fund.
The USANA Green Initiative has been so successful that in 2015 the company achieved Climate Registered™ status. The Climate Registry operates voluntary and compliance greenhouse gas emission reporting.
Is this information relevant for privately held direct selling companies? ABSOLUTELY.
Not only do new companies, as well as growing companies, need to be ‘investment ready’, they need to focus on sustainability programs that help highlight direct sellers’ products to the general public – a new pool of customers and new Distributors.
Generally speaking, studies have shown that consumers are going green and are more willing to buy products that promote sustainability. In 2015, Survey Monkey found 56% of respondents in the U.S. will consider a higher price point for green products. A Nielsen survey in 2014 noted that 50% of global consumers were willing to pay more for goods and services from socially responsible companies. A McKinsey survey in 2012 found that roughly 70% of U.S. and European consumers were will to pay more for green products and services… which also helps direct selling companies as their price points tend to exceed those of their retail competitors.