A new study by Sustainalytics highlights links between sustainability performance and shareholder value. The report, Sustainability and Materiality in the Natural Resources Sector looked at environmental and social practices in the forestry, mining and oil and gas sectors and found positive correlation to competitiveness in each sector.

"After 20 years of assessing corporate responsibility practices, I know that sustainabilty performance should be factored into valuations. The analysis in this report reveals the extent to which environmental and social factors can impact competitiveness," said Michael Jantzi, CEO, Sustainalytics. "What I find most significant is that the analysis allows us to highlight the factors that are most material."

Sustainalytics is unveiling the Sustainability and Materiality in the Natural Resources Sector report during the World Economic Forum to underscore the importance of a 360 degree perspective of business issues when developing growth strategies.

According to the Sustainability and Materiality in the Natural Resources Sector report, the management of environmental and social practices positively influence overall firm competitiveness. These findings are based on a metastudy of more than 50 reports and an analysis of the links between eight business drivers common to companies in the natural resources sector and nine categories of environmental and social performance. The findings from this process were tested through interviews with industry analysts, institutional investors and company representatives during a two-month period in 2010.

Sustainalytics' analysis revealed operational efficiency and access to labour as business drivers greatly affected by strong corporate responsibility practices. However, the management of reputational risk was found to be the business driver most affected by corporate responsibility performance across the industries. Overall it is also important to note that each of three industries is affected by sustainability factors unique to its sector.

"This report shows that sustainability research can identify tomorrow's leaders, and by doing so allow investors to improve the risk and return of their portfolio," stated Diederik Timmer, Managing Director, Sustainalytics.

Our research also shows that companies in these sectors require the support of local communities, such as indigenous or rural groups, regardless of region. The following summarizes some of the other key findings by sector:

Forestry

• Strong community relations aided companies in gaining and maintaining access to natural resources and enhanced corporate reputations
• On the environmental side, new technologies and innovations related to non-traditional forest products (e.g. biofuels) are predicted to generate future revenues

Mining

• Strong corporate responsibility, in particular good employee relations practices, was predicted to be an increasingly important factor in attracting skilled workers
• Good aboriginal and community relations practices were found to forestall community opposition and to improve access to natural resources

Oil and Gas

• Responsible environmental operations can positively impact reputations and lower costs through operational efficiency
• Companies with strong climate change mitigation practices are better positioned to respond to emerging climate change regulations

The full reports on the oil and gas, forestry and mining sectors will be released in March. To download the executive summary and register for copies of the three industry reports visit our web page.

About Sustainalytics
Sustainalytics is a global leader in sustainability research and analysis for investors and financial institutions. We provide a global perspective, underpinned by nearly 20 years of local experience and expertise in the responsible investment market. Sustainalytics strives to continuously provide high-quality solutions and commits to remain responsive to the current and future needs of our clients. Recently, Sustainalytics was voted Best ESG Research House by IPE/TBLI. Sustainalytics is headquartered in Amsterdam and has offices in Boston, Frankfurt, Madrid and Toronto. For more information, please visit Sustainalytics.com.

Sustainalytics

Sustainalytics

Jantzi Research Inc. is an independent investment research firm that was formed in 1992. The firm evaluates and monitors the environmental, social, and governance (ESG) performance of global securities. Our clients consist of mutual funds, pension funds, money managers, investment advisors, foundations, religious orders, government, and others who integrate ESG criteria into the investment decision-making process. Whether our clients are focused on customized portfolios, engagement strategies, or are utilizing Jantzi Research as part of their risk/return analysis, Jantzi Research is a proven innovator of socially responsible investment (SRI) products, services and research tools.

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