Friday, April 22, 2011

Greed can be good. Ask Mother Earth.

I've been saving this post for Earth Day because Bloomberg's decision to carry environmental information on its financial news terminals is indeed a gift to Mother Earth.

Paul Tullis at Fast Company expertly reported this decision and the rational behind it earlier this month.  Bloomberg is catalyzing an emerging truth on Wall Street: A positive environmental track record is a good indicator that a company is well run and is more likely to offer superior financial performance over time.  Now Bloomberg is supplying the numbers financial wizards need to track and price this theorem into valuations.

This blog has focused on the consumer side of the sustainability is good business debate - suggesting that consumers more and more choose brands that act with integrity toward customers, employees and the environment.  Bloomberg's action has the effect of enlisting the almighty hammer of the capital markets in the cause.

This will get the attention of the corner office crowd.  Companies will look for ways to improve their ESG (environmental, social and governance) scores because there's money to be made doing it.  Altruism is nice but in the end, it's behavior that counts.

This is an opportunity for the smart marketing executive to bring ESG issues into the boardroom.  A significant improvement in ESG will improve not only the stock price but can provide a real and meaningful point of differentiation for consumers making purchase decisions (read; good ESG = free marketing).

I've become more and more skeptical that government will ever have the fortitude to come to the aid of the environment in meaningful way.  The challenges are too big, too immediate and big money is too entwined in the workings of Washington.

I'm heartend this Earth Day by the vision of Wall Street and engaged consumers doing what government can't by making sustainability not only a priority but profitable.  Mr. Gekko, meet Mr. Gore.  I think you two have something to talk about.