Gender influences investment decisions

How the sustainability label influences purchase and investment decisions

The word “sustainability” is being used inflationarily in the media and in corporate PR departments. The Braunschweiger Privatbank shows what is hidden behind the term and to what extent sustainability is a criterion for end consumers and investors in their purchase decisions.

The trend is towards sustainable products // Graphic: AdbobeStock @elenabsl

Sustainability in the Crisis ?!

After “Corona”, “sustainability” has probably been one of the most frequently mentioned words in the media in recent weeks. It is often about demands for a more sustainable economic system. In addition, however, the term has been used inflationarily in the advertising industry for some time to give products a positive image - also or precisely because this is difficult to verify for third parties.

As part of a study by the Internet platform Utopia from 2019, around 14,000 sustainability-conscious people were asked about their attitudes, expectations and behavior. What was particularly exciting about the result was how many of the people surveyed consider “sustainability” to be “very important” for different things in life

  • Groceries (71%)
  • Body Care & Cosmetics (69%)
  • Household items (59%)
  • Energy (58%)
  • Travel & Vacation (27%)
  • Furniture & living (21%)
  • Banks & Insurance (20%)
  • Electronics (18%)

Even if the term sustainability is used in such an inflationary way, the topic has obviously not yet fully penetrated society and consumer behavior.

How the United Nations defines sustainability

But what exactly is sustainability? At Wikipedia it says in the introduction: "Sustainability is a principle of action for the use of resources, in which a permanent satisfaction of needs is to be guaranteed by preserving the natural regenerative capacity of the systems involved (especially of living beings and ecosystems).

The United Nations (UN) have also dealt extensively with the topic and adopted 17 sustainability goals in the General Assembly in September 2015 on the occasion of the World Summit on Sustainable Development. These are:

1. End poverty - End poverty in all its forms everywhere.
2. Secure nutrition - End hunger, achieve food security and better nutrition, and promote sustainable agriculture.
3. Healthy life for everyone - ensure a healthy life for all people of all ages and promote their well-being.
4. Education for everyone - Ensure inclusive, equitable and quality education and promote lifelong learning opportunities for all.
5. Gender equality - Achieve gender equality and empower all women and girls for self-determination.
6. Water and sanitation for everyone - Ensure availability and sustainable management for all.
7. Sustainable and modern energy for everyone - Ensure access to affordable, reliable, sustainable and contemporary energy for everyone.
8. Sustainable economic growth and decent work for all - Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
9. Resilient infrastructure and sustainable industrialization - Build a resilient infrastructure, promote inclusive and sustainable industrialization and support innovations.
10. Reduce inequality - Reduce inequality within and between countries.
11. Sustainable cities and settlements - Make cities and settlements inclusive, safe, resilient and sustainable.
12. Sustainable consumption and production methods - Ensure sustainable consumption and production patterns.
13. Fight climate change - Take immediate action to combat climate change and its effects.
14. Protection of the seas - Preservation and sustainable use of the oceans, seas and marine resources.
15. Protect terrestrial ecosystems - Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, end and reverse land degradation and put an end to the loss of biological diversity.
16. Peace, Justice and Strong Institutions - Promote peaceful and inclusive societies for sustainable development, provide access to justice for all, and build efficient, accountable and inclusive institutions at all levels.
17. Strengthen the means of implementation and global partnership - Strengthen the means of implementation and revitalize the global partnership for sustainable development.

How sustainable companies really are

This is a complex catalog. It is often difficult for external third parties to understand whether a company can be classified as sustainable or not based on this. Due to the complexity, many market participants have drawn up their own criteria, which are more or less strictly based on the 17 goals. For example, while some people completely reject Lufthansa, others grant it the sustainability seal because the group is doing a lot in its industry to make air travel more sustainable.

In order to shed light on this, our partner, DZ Bank, awards its own seal to assess the sustainability of companies for the provision of research material. The sustainability seal is awarded in three steps.

(1) First of all, the three classic sustainability dimensions of ecology (E), social (S) and corporate governance (G) are examined, which results in an ESG score.
(2) The next step is to integrate the economic sustainability dimension (E). With the help of various key figures, an economic factor is determined, which is included in the EESG sustainability scores.
(3) In a final analysis step, the examined issuers are classified into the categories "sustainable" and "not sustainable". Sectoral and cross-sectoral sustainability limits, hard and soft exclusion criteria as well as current sustainability controversies from the areas of ecology, social affairs and governance are taken into account.

Which corporations have (not) received the DZ Bank sustainability seal

Some well-known companies that have received the DZ Bank sustainability seal include adidas, Allianz, BASF, Deutsche Telekom, IBM, Intel, Nokia.

For comparison: Well-known companies such as Fielmann, Hornbach, Lockheed, Rheinmetall and British American Tobacco have not received this seal.

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May 28, 2020 by Thomas Heinisch Tag: Sustainability