As I continued to engage with companies that implement sustainability, I noticed a pattern. A triangular relationship between a company’s financial, social and environmental sustainability.
For a company to pay its employees fairly, it needs sufficient revenue per employee. For them to invest in environmental improvements in their product lines, the product has to be profitable at the unit economics level.
The core function of a business is to generate returns for its shareholders. That principle cannot be diluted by ESG, or other initiatives that take the focus away from generating returns.
How is this possible for some companies to be highly profitable, while producing and selling sustainable products and services? This is because they recognize this triangular relationship.
They need a market where they can gain an increasing market share for their products and services. That market is called the formative years economy. One that is driven by the preferences of the younger generations, 16-30 years of age. This crucial time frame is when people make several choices for life, work, housing, transport, and develop an affiliation with brands.
Now, this concept is enshrined in my book ‘Eco-economics: Navigating the Path to a Sustainable Future.
In every post, in this newsletter, you will see me apply the concept to my analysis and explain how these stocks are worthwhile investment opportunities. I also recommend sustainable products that fit this criterion. Want to implement eco-economics in your business?
For those in the UK, you can get a signed copy of my book, by filling out the form below. I charge £10 including shipping, instead of £15 on Amazon.