A research project evaluating the linkages between a corporation's environmental and social performance and their financial performance.

1. THE NET WORTH OF SUSTAINABILITY:
AN EMPIRICAL INVESTIGATION OF 17
COMPANIES
Hannah McKee, Duncan Clauson, Robb
Schmitt, Christopher Burgess, Catherine Carter,
Lydia Caudill, Hans Minea, Kendra Schaaf,
Christine Scheele, and Dorothy Paun

2. RESEARCH PROBLEM
 Sustainability is defined as meeting society's
present needs without compromising the ability
of future generations to meet their own needs.
Some people consider this the best chance for
society to advance into the 21st century without
sacrificing economic progress or our planet.
 Because public opinion has shifted toward a
deeper sustainability awareness and ethic,
managers have become increasingly concerned
about how to enhance sustainability performance
without compromising financial performance.

3. RESEARCH IMPORTANCE
The heart of business analysis, for
management, investing, or other external
assessment, is the ability to analyze
information. Stakeholders are demanding
that businesses become more transparent
and share information relating to
performance and business operations. This
research contributes to the shifting of a
norm toward more disclosure.

4. RESEARCH GOALS
 To explore relationships among corporate financial,
social responsibility, and environmental
performance, also known as the TRIPLE BOTTOM
LINE. The commonly used phrase “bottom line”
refers to net income, or profits, which is the last or
“bottom” line on an income statement.
 To uncover information that may be useful to
corporate managers for decision making and
planning.
 To contribute to the conversation that addresses
whether or not businesses can be financially
successful while attending to social responsibility
and environmental sustainability.

5. METHODS: SAMPLE
 COMPANIES: 17 corporations were studied
 INDUSTRIES: Consumer goods, energy, food/beverage, natural
resources, technology, and transportation
 DATA COLLECTION: Data were collected from 2008 financial
reports and 2008 sustainability reports
Target Sustainability Report Marathon Sustainability Report Safeway Sustainability Report
Cliff Natural Resources Financial Report GE Financial Report UPS Financial Report

6. METHODS: DATA VARIABLES & ANALYSIS
 FINANCIAL VARIABLES: (growth means change between 2007 and 2008
financial data)
 Owners' equity growth: Amount of the business that belonged to owners
minus liabilities owed by the business
 Revenues growth: Amount of money received for selling goods and services
 Net income growth: Profits (revenues less costs/expenses, interest, taxes)
 Return on equity: Profit earned for each dollar invested by owners
 SUSTAINABILITY VARIABLES:
 Environmental Intent: information about the firm's vision, policies, and
management of environmental components
 Environmental Performance: various environmental indicators like energy
use, water use, recycling, waste produced, air emissions, etc.
 Social Intent: information about the firm's vision, policies, and
management of social responsibility components
 Social Performance: social indicators like community investments,
volunteerism, customer and employee health and safety, management
diversity, human rights
 DESCRIPTIVE STATISTICS (mean, median, range, and Pearson correlations) were
run using SPSS software

7. RESEARCH FINDINGS 1/3
Actions speak louder than words, but words are seeds of
environmental stewardship and social responsibility
 Overall, when comparing means, environmental and
social intent mean scores were higher than
environmental and social performance mean scores
 Social performance mean scores were higher than
environmental performance mean scores
Percent Difference
Social Responsibility Environmental
(Social-Environmental)
Intent 65 72 - 11%
Performance 41 31 24%
Percent Difference
59% 132%
(Intent-Performance)

8. RESEARCH FINDINGS 1/3
What goes around comes around
 Using Pearson correlations, we discovered
significant (< 0.05) correlations among
environmental, social responsibility, and financial
performance metrics. Said another way,
companies that participate in environmental
initiatives and social investment reap the benefits
of increased profitability.
Leverage : Env. Perf : Env. Intent : Env. Perf. : Social Intent :
Return on Equity % Env. Intent Social Intent Social Intent Social Performance
Pearson -0.935 0.617 0.547 0.651 0.665
Correlation
Significance 0.000 0.008 0.023 0.005 0.004

9. RESEARCH FINDINGS 3/3
Doing well by doing good
 UPS: industry innovator, leader in volunteerism
 UPS’s growth in profitability was 686%, compared to -3%
(median for our sample of companies)
 UPS maintains the most fuel-efficient fleet in the packaging
industry and was the first to report a global CO2 footprint
 UPS’ Neighbor to Neighbor employee volunteer program
donated over one million volunteer hours in 2008
 Chevron: more energy, smaller footprint
 Chevron’s growth in profitability was 28% (-3% median)
 Chevron donated $160 million in community engagement
initiatives in 2008 and is the first Corporate Champion of the
Global Fund to Fight AIDS, Tuberculosis and Malaria
 Chevron decreased overall energy use 28% since 1992 and has
met its own CO2 reduction goals every year since 2004

10. CONCLUSION
Triple bottom line analysis addresses the shift
in public discourse toward greater corporate
transparency
This type of analysis captures both a firm’s
organizational and societal success
well as their organizational and societal
impacts. Our study indicates that companies
with highly sustainable performance are able
to reap financial rewards through responsible
environmental and social stewardship.