Investors help us make a better world by questioning environmental standards

I also mentioned that customers aren’t ready yet to pay specifically for these green technologies but as a company we incorporate them anyway, as it leads to improved buildings and a better quality of product (even if customers don’t recognise this at first inspection). We do this in part because we believe as a company in meeting our social responsibilities to create a better environment for all.

This month I’ll broaden the discussion slightly around how wider investor pressures are driving real-estate companies to improve their environmental and social performance even without the company itself necessarily having a belief or commitment, and why companies with this kind of commitment are signalling an inherent quality throughout the business.

As part of our investor relations programme, we answer many queries from many shareholders. Some of these queries are specifically related to our environmental policies. The larger institutional investors have their own specific policies and they send questionnaires to us that include questions on environmental performance.

Some of these questionnaires are very long and very detailed. For example, they can include questions on such things as how we’re reducing electricity usage and water usage per unit of output, and requests for details on the measurements of this.

We take investor relations very seriously, as shareholders are important stakeholders in the business, along with customers, suppliers, employees and our broader society. In fact, we were rewarded for Outstanding Achievement in Investor Relations at the recent Stock Exchange of Thailand Annual Awards based on our providing investors with the information they need to make informed decisions.

But regardless of our individual commitment, the existence of these questionnaires being sent out by large institutional shareholders demonstrates a source of pressure that is being applied to all companies to improve their environmental performance. This pressure will lead the best companies to adopt best practices simply because they don’t want their share price to suffer.

So why do the funds care? They care because certain companies had a commitment to environmental policies even before anyone else thought it was important. And then some bright-spark analyst at a fund, looking for a way to get a better performance than everyone else, noticed that companies with these policies delivered better returns. This analyst didn’t need to know why, just that good environmental policies are associated with better corporate performance.  

This knowledge spread in the investment community, so now the whole investment world cares about environmental policies, not because they’re environmentalists, but because it makes them more money.

Good environmental policies seem to be a signal about the inherent quality of a company. And just as with the green technology we include in our buildings, where the customer doesn’t immediately see how the quality of their home is improved, they seem to be an indicator of good practices throughout the business. Customers should be looking at corporate environmental policies as an indicator of the quality of the home they buy.

So pure self-interest from investors wanting better returns can drive positive changes in corporate environmental policies, and as the chief executive officer of a large company with a significant environmental impact, I’m very glad that our commitment to lead environmental and social good practice is not just the right thing to do ethically, but the right thing to do for the business and all our stakeholders.