Sustainability: Driving Financial Returns and Strategic Growth

Driving financial returns and strategic growth - Insights from a KPMG study

Columns

Unlocking Financial Success Through Sustainability

In today's ever-changing business world, sustainability has become a key factor in determining financial success. In our white paper “Is Sustainability Good for Financial Performance?”, we explore the relationship between sustainability and financial returns as well as the impact of sustainability investments on financial performance.

We examined the relationship between 60 sustainability metrics and gross profit margin, conducting an econometric analysis of more than 2,500 businesses across 18 industries and 60+ countries. Through surveys and studies, such as the ESG and Financial Value Survey, we identified the most valuable ESG efforts for companies across different sectors.

Dive into our thinking:

Is sustainability good for financial performance?

This study emphasizes the potential for sustainability to drive financial returns, while highlighting the importance of aligning related investments and decisions with broader business strategies.

Download PDF

Key sustainability indicators for financial success:

We found 21 indicators strongly linked to strong financial performance, including:

1

Lower CO2 emissions: Reducing your carbon footprint can lead to operational efficiencies and cost savings, boosting your GPM.

2

Environmental impact reduction: Initiatives to reduce land and e-waste impacts not only protect the environment but also enhance your brand reputation.

3

Business ethics policies: Strong ethical practices build trust and loyalty, which can translate into higher profits.

4

Employee well-being: Providing day care services and reducing staff transportation impacts can improve employee satisfaction and productivity.

5

Diverse leadership: Companies with a higher share of women executives tend to perform better financially, fostering innovation and better decision-making.

Why it matters:

Sustainability strategies can only be sustainable if they drive growth by giving firms a competitive advantage. Moreover, sustainability practitioners report that measurement is a key challenge to secure resources and achieve cross-organizational alignment.

Our study provides a comprehensive analysis of the financial returns to sustainability, offering valuable insights for business leaders. Our findings are statistical relationships based on data from thousands of companies, but each company should carefully consider sustainability investments within the broader context of its overall business strategy and assess how each investment impacts its financial metrics through data collection and measurement. As the business landscape continues to evolve, sustainability will undoubtedly play a crucial role in shaping financial outcomes.

Leveraging insights for strategic decisions:

Business leaders can use these insights to prioritize sustainability investments that are most likely to yield financial returns. By measuring the impact of these investments, you can secure the necessary resources and achieve cross-organizational alignment.

Embrace sustainability not just as a moral imperative, but as a strategic advantage that can drive your company's financial success.

Take the first step:

Ready to transform your business through sustainability? Contact us to learn more about how you can integrate these key indicators into your strategy and achieve lasting financial success.

Explore more

Meet our team

Image of Erkan Erdem
Erkan Erdem
Principal, Economic & Valuation Services, KPMG US

Other services tailored to your business

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Headline