230 Pages Posted: 18 Nov 2011
Date Written: 2008
Today the market of sustainable investment is rapidly growing. Environment and ethic issues, corporate social responsibility, as well as sustainable development becoming more significant among the increasing number of institutional and private investors. This trend is emphasized by environmental legislation and policies, national, European and international. An increasing number of institutions are using sustainability aspects in their investment criteria.
Corporations are increasingly expected by shareholders, business partners and all other stakeholders to improve competitive advantage by demonstrating economic progress while maintaining environmental care and responsibility. Corporate front-runners have realized the value of potential of meeting and sharing these expectations proactively and by creating innovative and sustainable solutions in their marketplace.
This practice leads to a very difficult and new positioning of environmental issues. In combination with social and economic issues, environmental responsibility is becoming an intrinsic part of a corporate strategy toward sustainability. Environmental and social issues are transferred from a matter of risk an additional cost into opportunities and the creation of value for the company and it stakeholders.
Sustainable investments are driven to enterprises, which are entering to new phase of production and management. Asset management companies and individuals are today specializing in the implementation of sustainability driven investment strategies for private and institutional investors.
Nowadays market is characterized by growing interest for the issue of the sustainability. Concerns about some non-core issues become more and more relevant in creation of the business strategy. Some of the most important are: set of environmental issues, from the air pollution to problems of endangered species in Arctic; ethic standards which become rather formal then matters of the sense for the justice and fair practices. Those issues means created and caused mushrooming of the filed of corporate responsibility. Indeed, today responsibility of the company is not just increasing the value for the shareholders – modern companies in the most developed countries looks like coalitions of the different stakeholders which tries to maximize the goals of the broad set of participants.
Sustainable development is the result of the shifting the focus or rather blurring the simple maximization of the profit in the long-run. Web sites of the corporation are rather about good corporate citizens and philanthropic actions then increasing the value of the owners, they are rather about third generation of the human rights then increasing the productivity or rather about endangered mammals then high profits.
Those trends are followed by the governments' actions – from the legislative on environmental issues toward work of different agencies and offers of the political parties. In addition, it is not bounded by national states; it is in fact, regional and international issue. Many global institutions, which are not multinational companies deals with abovementioned issues. On the other side, issues of sustainability are more and more important in everyday calculations and projections. Net present value, on of the basic concepts is enhanced by using the effects of the investment on the community rather then effects on the company.
The result of the prevailing tendencies of the growing importance of the social aspect of doing business is shifting of expectations. Shareholders and other relevant stakeholders expect managing of the companies focused on the improvement of comparative position on the global or national market by respecting the environment concerns of the global or national audience. Progress in the terms of the high yield had been changed for the yields for the shareholders, but with clear vision of the sustainability of accumulated wealth for the next generations. However, as well as all the bridging the gaps in human history, care for the environment and human capital is not result of the discovering the philanthropic elements in the boards of managers and or result of the high moral of investors – it is rather awareness that only by the respect of expectations of the customers company can survive and continue harvesting. Customers demands are combination of the good products & services with reasonable prices, with few layers of the environment, ethics and pathetic.
Keywords: Sustainability, Commercial Bank Serbia, Investing
Suggested Citation: Suggested Citation
Arsov, Dr. Aleksandar, Strategic Sustainability of Investment and Business - Case of Commercial Bank Serbia (2008). Available at SSRN: https://ssrn.com/abstract=1961593 or http://dx.doi.org/10.2139/ssrn.1961593
By Ross Levine