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Clear Advantage: Building
Shareholder Value / Environment: Value to the Investor
(EVI)
was designed
to help provide businesses approaches on how to measure, manage and communicate
EHS value to the financial community thereby making tangibles out of
intangibles. It is designed for senior company executives, including CEOs, CFOs
and Investor Relations (IR) professionals, mainstream financial analysts and
fund managers and EHS and other company managers. The new tool includes four
sections: An Executive Summary of the tool; Making the Case that provides
evidence to support the correlation between EHS performance and financial
outcomes; A Closer Look that provides ten important EHS-related value drivers
and related case studies from GEMI member companies; and From Concept to
Practice that provides a methodology for EHS and IR colleagues to apply the new
knowledge and engage senior executives
GEMI has produced a series of
tools that demonstrate how excellence in EHS can add shareholder value to
companies. The GEMI “Value” journey began with Environment: Value to
Business (EVTB) published in 1998 and continued with Environment: Value
to the Top Line (EVTL) published in 2001. The purpose of Clear
Advantage: Building Shareholder Value, GEMI's latest tool in the series, is
to enable businesses to measure, manage and communicate EHS value to the financial
community or, in the words of Bob Brady, retired fund manager at Citigroup, to
“turn the intangibles into tangibles.” EHS is among the intangible value
drivers that are hidden sources of organizational power—from regulatory
compliance that prevents liabilities, to proactively managing risk. Leveraging
EHS resources can help create additional value for the enterprise through
strategy execution, enhancing brand and reputation, boosting innovation and
leadership.
This report is a
resource and guide containing a variety of data and tools to assist managers in
unlocking the value contained in activities they are required to perform but
frequently regard as a cost of doing business—rather than as an opportunity to
better position the enterprise with customers, investors and lenders, alliance
partners and current or prospective employees. Case studies from GEMI members
help illustrate these opportunities.
Clear Advantage
provides compelling evidence of the link between EHS
activities and shareholder value. GEMI created the diagram below, which
illustrates the many pathways to shareholder value. Because an enterprise’s EHS
function cuts across many areas of business, this report covers the EHS
function as well as related organizational activities: community involvement,
stakeholder relations, governance, transparency and business continuity.
Utilizing the value drivers identified, this report will demonstrate that
strengths in EHS can add value to the enterprise. Specifically, this report
will show how companies can measure and disclose the strategic contributions of
EHS to enhanced market valuation and identify EHS-related indicators that are
linked to intangible value drivers. The intended audiences for this tool are
senior company executives, including CEOs, CFOs and Investor Relations (IR)
professionals; mainstream financial analysts and fund managers; and EHS and
other managers. It can also provide members of the socially responsible
investment communities with useful data, as well as guidance for EHS executives
on how to better advise managements with whom they are engaged.
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