Background and Context

This book explores the business and investment implications of sustainability. The heightened attention to sustainability presents both opportunities and risks for companies and investors. There are immense opportunities for companies that understand how to identify, measure, manage, and mitigate accompanying risks. New regulations, subsidies, and other environmentally friendly policies provide an opportunity for companies that are skilled at taking advantage of such conditions. Smart managers understand that a company’s financial success is influenced by sustainability. If this additional information is considered when making investment and resource allocation decisions, it can result in enhanced resilience and long-term profitability of the company. Ultimately, it is the long-lasting, value creating, and lucrative business practices that transform a company into a market leader which transforms the business and investment environment over time. One hundred years ago, the Model T Ford became the market leader for consumer affordable cars. Today, Tesla has become the leader in the transition from gasoline and diesel to electric cars. At the same time, there is a significant material risk to inexperienced business and investors who get involved in this highly regulated and politically charged area of the economy but are not skilled in navigating this complex landscape. The authors demonstrate that companies and investors can successfully navigate the challenges of sustainability, mitigating risks, and seizing opportunities.