Sustainability in Business by David Hobson Myers

Author:David Hobson Myers
Language: eng
Format: epub
ISBN: 9783319966045
Publisher: Springer International Publishing

Thus, an increasing social distance, δ, provides lower value and a near-zero social distance gives greater value to the stakeholders that the social distance is in relation. Growth is still a very powerful motivator in valuation with or without social distance.

Role of Government

The role of government and its effects on the growth of companies comes in many different forms from laws, regulation, enforcement, subsidies, and initiatives. Even in the midst of the Great Financial Crisis, there was positive movement in green stocks in anticipation of the new administration. The markets believed that government’s attitude in all its forms would favor green companies. Globally, efforts by governments to move toward renewable energy have changed the cost structure of generation as marginal costs of production have fallen. China and Germany through production and demand, respectively, have moved the solar power industry forward. The reduction in solar energy production costs has also been aided by technological advances or innovation. Over the Christmas weekend of 2017, energy prices were reported to be negative in Germany due to the overproduction of electricity from renewable sources and lower demand from mild weather.

Growth is key to all businesses and their valuations. These three drivers—leverage, innovation, and demographics—have different impacts on the sustainability of a business as well. Innovation may be a driver for both growth and sustainability if the innovation’s direction is towards more sustainable products and processes. Demographics inherently have a sustainable or social justice angle. As a business expands its demographic reach, it may decide to serve underserved populations while still provide opportunities for growth. All of this growth requires the legal and regulatory structure to nurture it.

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