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The corporate sustainability actions that reward investors

Lou Lee — Tue, 13 Oct 2026 12:14:02 +0000

The corporate sustainability actions that reward investors

Lou Lee Tue, 13/10/2026 - 12:14

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US companies leading on transformative sustainability behaviours delivered an extra 4.56 per cent return above market expectations from 2016 to 2024, according to research by the Leonardo Centre on Business for Society at ImperiaBusiness School
Investors can help drive transformation by directing capital towards companies making meaningful changes and using their influence to encourage further progress.
High environmental, social and governance (ESG) ratings did not produce comparable returns: what drives value is embedding sustainability into operations and innovations, as opposed to philanthropy or communications.

For decades, corporate sustainability has largely been framed around ethics and public relations, with governments driving change through regulation and taxation. Against this backdrop, political opposition and scrutiny of ESG-labelled investments, particularly in the US, have fueled the narrative that sustainable investing is in retreat.

But new research by ImperiaBusiness School’s Leonardo Centre on Business for Society suggests the relationship between sustainability and financial performance deserves a fresh look. Rather than abandoning sustainability, the market may be repricing it. Investors are looking for evidence that sustainability can strengthen business performance and create shareholder value.

In A Behavioural Revolution, launched in 2025, researchers found that sustainability can generate financial value when companies embed it into how they operate, innovate and compete, rather than focusing only on external-facing commitments such as philanthropy and communications.

The findings are striking, particularly in the US. The US Finance for Impact Report, led by Dr Shuying (Melody) Wu, Research Fellow in Sustainable Finance at the Leonardo Centre, found that US companies most committed to transforming their businesses through sustainability generated an annualised alpha of 4.56 per cent between 2016 and 2024. Alpha means the extra profit or returns the portfolio made above the market average, calculated per year. It also proved that these companies are more resilient during market downturns.

The evidence base for ��’s Finance for Impact Research is a unique innovation in itself - the GOLDEN Sustainability Dataset - leverages the power of AI to identify more than 2.6 million sustainability initiatives from around 88,000 reports published by over 18,000 companies globally. Researchers then apply a second new and novel concept: the Leonardo Centre’s Business Impact Maturity framework, a methodology for classifying initiatives according to what companies do and how deeply sustainability is integrated into their business.

The research is still relatively young and has so far focused on finance, but the potential to explore other hypotheses about the relationship between identifiable corporate behaviours and the impacts they create is vast.

What counts as transformation?

Drawing on concepts from psychology, Business Impact Maturity provides a way to classify business behaviours according to their level of development, helping distinguish between actions that simply signal intent and those that drive meaningful real-world impact.

Advocacy includes externally oriented or philanthropic activity; preparation covers capability-building, such as employee development and sustainability processes. Transformation goes further, embedding sustainability into operations, innovation, products and business models. In the US analysis, transformation was the only category consistently associated with statistically significant excess returns.

Transformative actions can include investing in research and development, launching new products and redesigning processes. These changes can improve productivity and resilience and create growth opportunities. By contrast, activities that remain largely symbolic or external-facing may enhance a company’s reputation without changing the underlying economics of its business.

Conventional ESG ratings can provide information about companies’ disclosures, governance structures and management of sustainability-related risks. But they do not necessarily show whether a company is translating sustainability into business transformation. In the research, highly rated ESG portfolios did not generate the same consistent alpha as portfolios of companies transforming their operations and innovation.

The sustainability that pays differs by market

Across geographies, sustainability creates value when it changes the business, although the sustainability actions most closely associated with financial returns differ by market.

For instance, the Japan Finance for Impact Report, which covers fiscal years 2012 – 2024, finds that sustainability-led innovation, rather than transformation in its broadest sense, is the clearest source of value creation.

In Japan, companies that focused on sustainability-led innovation also outperformed the market, delivering returns 3 per cent above expectations annually. An investment strategy that bought shares in companies leading on innovation and sold shares in those lagging behind delivered annual returns 4.7 per cent above expectations..

Investors and CEOs hold the lever

The message for investors is clear: capital allocation can reward companies that turn sustainability commitments into meaningful business change.

Index providers can create indices ranking companies on sustainability transformation, which passive managers can track. Passive investors can influence investment mandates, while long-term and public capital can direct funding towards companies driving transformation. Active investors can encourage change through board engagement, shareholder proposals and examples of best practice.

For business leaders, the implication is equally direct. Doing good and generating returns need not be a trade-off. But greenwashing and box-ticking to secure a better ESG score will not necessarily deliver either. The opportunity lies in changing how the business works — and demonstrating the value that change creates.

The Leonardo Centre on Business for Society advances responsible business through research and collaboration with scholars, businesses and global institutions. It is seeking partners to co-develop investment solutions and will present its research with investors and business leaders at COP31 (9–20 November 2026) and the World Economic Forum’s Annual Meeting in Davos (18–22 January 2027).

Should you like to explore collaboration with The Leonardo Centre directly, please contact Melody Wu, Research Fellow in Sustainable Finance at the Leonardo Centre on Business and Society.

“The conventional story, and there is some substance to it, is that firms face a clear trade-off: you can either do good or you can do well, but you cannot do both. … This new research tells us that story may no longer hold. It points to a fundamental shift in the way we should think about sustainability: sustainability is a source of alpha.”

— Richard Damania of the World Bank in a keynote at a Leonardo Centre–Ceres event 'Unlocking Shareholder Value Through Corporate Behaviour Insights.'

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Investing in nature: Why markets haven’t caught up yet

Pernille Holtedahl — Tue, 13 Oct 2026 12:14:02 +0000

Investing in nature: Why markets haven’t caught up yet

Pernille Holtedahl Tue, 13/10/2026 - 12:14

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In a bid to uncover how public equity markets address nature and biodiversity loss, new research from Pernille Holtedahl and Iva Koci reveals that nature investing is currently focused more on managing risk than finding new investment opportunities.
While investors recognise that nature-related risks can impact a company’s cash flow and long-term value, equity markets have yet to fully reflect these risks in company valuations.
Despite limited public nature-investment opportunities, water management emerges as the clearest investable theme.

Nature and biodiversity loss are high on the agenda of corporates and financial players. But how are investors responding to nature-related risks and opportunities in public equity markets?

Drawing directly from the perspectives of early-adopter investors through a bespoke survey and a series of semi-structured interviews, our research uncovers both the limitations and opportunities of investing in nature.

Nature investing is still primarily about managing risk

Currently, nature investing is more about managing risk than finding new investment opportunities.

Most public equity investors take nature into account from a financial perspective, mainly to protect their portfolios from potential losses. This includes exposure to operational, regulatory or reputational risks.

Nature is viewed less as a strategic source of long-term value creation.

The nature data challenge

So, what is holding nature investing back?

The problem is not simply a lack of reliable data, but the challenge of translating data into information that investors can use to make investment decisions. Data on nature and biodiversity can be hard to measure, leaving investors uncertain about which data are useful and reliable.

Investors also perceive a lack of evidence that positive nature impact translates into financial performance.

Furthermore, our research identifies that public equities seem to offer investors relatively few ways of investing directly in biodiversity restoration or nature itself.

More than half of respondents (55 per cent) indicate they invest in nature “solution providers” – public companies whose activities directly contribute to solving nature and biodiversity challenges. Consensus amongst public equity investors on what qualifies as a nature solution remains limited, however, leading to a broad definition.

Public equity investors primarily invest in how products are made, rather than in what is produced. For example, they invest in beverage producers that have reduced plastic packaging, or clothing brands that recycle fabrics or have improved their supply chain.

Direct investments in nature and biodiversity – such as sustainable agriculture or forestry – are better suited to private markets.

Altogether, these challenges create investment barriers that will remain difficult to address without better risk models, coordinated policy or market interventions.

Previous research from ImperiaBusiness School found that businesses are more likely to act on biodiversity when nature-related interventions deliver clear and measurable financial value, pointing to a similar underlying problem.

"Investor awareness of nature is running ahead of market action."

Investors see the risk. Markets don’t.

Investors overwhelmingly recognise that nature-related risks can negatively affect a company’s future cash flows and long-term value (financial materiality). Yet they report that these risks are not adequately reflected in current equity prices (market materiality).

This disconnect can be explained by the fact that nature-related exposures are difficult for markets to price because they are often long-term, uncertain and difficult to observe through standard valuation models.

The pricing picture is not the same across all sectors. Nature-related risks are more likely to be incorporated into equity prices in sectors that are directly dependent on natural capital. This includes land-intensive industries, such as agriculture, paper, pulp and timber, and utilities. Nature risks are more immediate and operationally relevant in these sectors, and therefore can have a more direct effect on a company’s cash flows.

Nevertheless, 63 per cent of respondents expect nature-related risks and opportunities to become more fully priced over the coming decade.

Why water stands out

Public nature-investment opportunities are emerging in areas where investment models are well established and available. Water management has emerged as the most highly rated opportunity amongst respondents, with nearly 80 per cent rating it as “very important”, followed by forests and other provisioning industries.

The sector has many characteristics that make investors comfortable. This includes a large number of listed companies, established business models, clearer revenue streams and stronger links to financial value, which help to attract investor attention.

Water-related challenges are also more immediately quantifiable, data-driven and actionable than other nature themes, making them easier to incorporate into existing investment processes.

What does this mean for markets?

Structural and informational barriers currently make it difficult for investors to incorporate nature considerations into public equity investment decisions. This early stage of nature investing is similar to where climate risk integration was in its early years: investors are increasingly aware of the risks, but markets have yet to fully price them in.

Nevertheless, growing awareness, regulatory developments and better measurement frameworks may help nature-related risks and opportunities become more fully incorporated into asset prices over the coming decade.

For now, investor awareness of nature is running ahead of market action.

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Nature is gaining investor attention, but markets are still struggling to price its value. New research reveals why investors remain cautious, what must change to unlock opportunities, and why water is emerging as a key area to watch.

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Leonardo Centre takes sustainability research to Wall Street investors during New York Climate Week

Lou Lee — Mon, 14 Apr 2025 10:15:24 +0000

Leonardo Centre takes sustainability research to Wall Street investors during New York Climate Week

Lou Lee Mon, 14/04/2025 - 10:15

23 October 2026 News

Dr Omar Mir launches ImperiaBusiness School’s Technology Leader Speaker Series with a call to put people at the heart of AI

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21 September 2026

ImperiaBusiness School's Leonardo Centre on Business for Society will bring its latest sustainability research directly to institutional investors this month, co-hosting an invitation-only roundtable during New York Climate Week. The Investor Case for Transformation takes place on 24 September at the World Climate Summit in New York, convened with Natixis Investment Managers and the World Climate Foundation.

The 60-minute closed-door session will bring together around 30 senior asset owners, asset managers and private-market investors to test a practical question: can observable evidence of corporate transformation give investors a more decision-useful signal than intentions, disclosures or sustainability labels alone? For the Leonardo Centre, it is a chance to take its research out of the report and into the room where capital allocation decisions are actually made.

The discussion draws on the Centre's GOLDEN Sustainability Dataset, which tracks more than 360,000 initiatives across around 3,000 US-listed companies between 2015 and 2024, part of a global dataset covering 2.6 million initiatives at more than 23,000 companies. Using a behavioural maturity framework that distinguishes advocacy, preparation and transformation, the research found that a portfolio of US companies leading on transformative, innovative sustainability action generated 4.56% annualised alpha over the period studied, without taking on more downside risk than the market.

The roundtable is structured around four themes: identifying transformation, strengthening investment decisions, translating evidence into practice and mobilising capital for transformation. It combines a short presentation of the findings with a moderated discussion and audience Q&A.

The confirmed panel is moderated by Laura Kaliszewski, Global Head of Client Sustainable Investing at Natixis Investment Managers, and includes Livio Scalvini, Executive Director of the Leonardo Centre on Business for Society; Richard Damania, Chief Economist at the World Bank; André Schneider, Chairman of the World Climate Foundation; Manon Salomez, Impact & ESG Specialist at Mirova US; and Hua Cheng, Portfolio Manager at Mirova US.

“This is about collaborating to enable real adoption, and translating that into impact.”

Livio Scalvini

Executive Director of the Leonardo Centre on Business for Society

Livio said the research was built to be used rather than filed away: "This is not an academic paper for citation. It has to be simple, it has to be clear, and it has to come with guidance on how you apply it. Nobody else has this data, so this is about collaborating to enable real adoption, and translating that into impact."

He added that scale depends on the network built around the research, not a single pilot: "The network of actors is the way to scale this. It is not about one pilot application, it is about impact at a systemic level. Value chain, scalability, and doing that through data networks and global platforms, that is our contribution."

The roundtable is one of several events Livio will take part in during New York Climate Week, spanning behavioural transformation, sustainable finance, Scope 3 decarbonisation and market mechanisms, reflecting the Leonardo Centre's wider push to connect rigorous sustainability evidence with the investors, companies and policymakers who can put it into practice.

Further research and reports from the Leonardo Centre's Finance for Impact work are available on the Centre's publications page.

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Global experts explore new ways to navigate an uncertain future

Lou Lee — Mon, 14 Apr 2025 10:15:24 +0000

Global experts explore new ways to navigate an uncertain future

Lou Lee Mon, 14/04/2025 - 10:15

23 October 2026 News

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8 September 2026

Researchers from across the world gathered at ImperiaBusiness School on 1–2 September for the Risk Sciences Annual Conference 2026, hosted by the Centre for Climate Finance and Investment (CCFI) in partnership with Tsinghua University’s School of Economics and Management.

The two-day conference explored how new approaches to risk analysis can help decision-makers navigate an increasingly complex world – from climate change and biodiversity loss to financial instability, cyber threats, artificial intelligence and supply chain disruption.

Bringing together expertise from economics, finance, mathematics, computer science, engineering and the life sciences, the programme highlighted the value of looking beyond traditional disciplinary boundaries. Sessions examined topics including sustainable finance, nature-related risks, voluntary carbon markets, AI and machine learning, macro-financial risks, insurance, and climate finance.

A series of plenary and parallel sessions featured leading researchers from leading universities and research institutions across Europe, Asia and North America. Discussions ranged from monitoring tropical forests and quantifying cyber risk, to understanding how AI can be made safer and how financial systems can better share and manage risk.

“The risks we face today are increasingly interconnected, and understanding them requires us to look beyond traditional boundaries. This conference brought together researchers from different disciplines to share ideas, challenge assumptions and develop new approaches to managing uncertainty.”

Professor Enrico Biffis

Professor of Actuarial Finance and Academic Director of CCFI

The conference also saw the inaugural Ken Seng Tan Award, recognising outstanding interdisciplinary research that advances the field of risk sciences. The award went to Fabio Maccheroni, Massimo Marinacci, Ruodu Wang and Qinyu Wu for their paper Risk Aversion and Insurance Propensity, which offers a new way to understand how people respond to uncertainty through their willingness to use insurance.

By convening leading academics and experts from around the world, the conference underlined ImperiaBusiness School’s commitment to research that is rigorous, relevant and connected to real-world challenges.

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From climate change to AI, leading researchers explored how better risk analysis can help build a more resilient future.

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From AI to climate: Global experts explore the power of contracts at ��

Lou Lee — Mon, 14 Apr 2025 10:15:24 +0000

From AI to climate: Global experts explore the power of contracts at ��

Lou Lee Mon, 14/04/2025 - 10:15

23 October 2026 News

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22 October 2026 News

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7 July 2026

The two-day conference welcomed researchers, policymakers and business leaders to explore how contracts shape issues as varied as AI, environmental conservation, corporate governance and workplace relationships.

Co-organised by ImperiaBusiness School’s Professors Renáta Kosová, Professor of Economics and Consul for the Faculty of Engineering and the Business School, and Patrick Bolton, Professor of Finance and Economics, alongside colleagues from the University of Bristol, the conference reflects an interdisciplinary approach to understanding how contracts influence business, markets and society.

A highlight of this year’s programme was the keynote lecture, “Citizen Investors” delivered by Professor Luigi Zingales from the University of Chicago Booth School of Business. He challenged the long-standing view that companies should focus only on maximising shareholder value and prioritising financial returns. Instead, he argued, businesses should consider shareholders’ broader values as citizens through maximising shareholder welfare. His talk explored how this shift could help tackle major societal challenges including climate change, inequality and the responsible use of corporate power.

“We want to create a forum where cutting-edge research is informed by real-world challenges and where those insights can, in turn, influence business practice and public policy.”

Professor Renáta Kosová

Professor of Economics and Consul for the Faculty of Engineering and the Business School

Other sessions explored industrial policy, corporate bonds, trade, copyright, environmental policy and workplace management. A panel on AI and firm governance brought together experts to discuss one of the biggest challenges facing organisations today. While speakers recognised AI's enormous potential, they also warned that without effective governance, its benefits could become concentrated among a small number of organisations, widening inequality and increasing economic and political imbalances.

Professor Renáta Kosová said: “When people hear the word ‘contracts’, they often think of the legal documents or pages of small print. But contracts are everywhere around us – they also exist as everyday agreements and understandings that shape decisions within organisations, markets and society. By bringing together theorists, applied researchers, lawyers and practitioners, we want to create a forum where cutting-edge research is informed by real-world challenges and where those insights can, in turn, influence business practice and public policy.”

The 2026 conference marked another milestone for a series that has quickly gained an international profile. With the continued involvement of Sir Oliver Hart, Professor at Harvard University and winner of the 2016 Nobel Prize in Economic Sciences for his pioneering work in contract theory, the conference continues to grow as a leading forum for interdisciplinary exchange, reinforcing ImperiaBusiness School’s role at the centre of a growing international conversation on the role of contracts in addressing today’s economic and societal challenges.

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Leading academics from around the world gathered at ImperiaBusiness School for the latest Theory and Applications of Contracts Conference, a biennial event bringing together cutting-edge research and real-world challenges.

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“Representation influences capital allocation” says Lara Cathcart at ��’s third annual Women in Finance event

Shamita Harsh — Mon, 14 Apr 2025 10:15:24 +0000

“Representation influences capital allocation” says Lara Cathcart at ��’s third annual Women in Finance event

Shamita Harsh Mon, 14/04/2025 - 10:15

23 October 2026 News

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22 October 2026 News

ImperiaBusiness School’s gender equality commitment recognised with Athena Swan Silver Award

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3 March 2026

Once characterised as a “boys’ club”, the finance sector is undergoing a cultural shift that is reshaping how decisions are made. Greater representation at senior levels is increasingly recognised as influencing how capital is allocated.

ImperiaBusiness School’s third annual Women in Finance event explored how women are influencing capital markets and redefining leadership across sustainable finance.

An investment narrative that is rooted in embracing change

The keynote address was delivered by Hortense Bioy, former Head of Sustainable Investing Research at Morningstar Sustainalytics, who focused on building a more sustainable and inclusive financial future. She explored how geopolitical uncertainty has reshaped sustainable investing strategies, creating both complexity and opportunity.

“The media often debates whether ESG is dead,” Bioy observed. “What we are witnessing right now is an evolution of practices, a recalibration by businesses and investors alike. What’s fading is a version of ESG that relied heavily on labels and was often disconnected from financial outcomes, to make room for pragmatism and realism.”

Her message underscored the importance of data-driven research and thoughtful analysis in navigating rapidly changing markets. She also offered advice to young women entering the sector, encouraging attendees to embrace opportunity: “Step beyond your comfort zone. Visibility and persistence matter. No is rarely the end.”

“Through events like Women in Finance, ImperiaBusiness School reaffirms its commitment to advancing women across the financial sector, creating space for leadership, visibility and meaningful dialogue.”

Lara Cathcart

Professor of Finance, Academic Director for MSc Finance and MSc Risk Management and Financial Engineering

Improving gender inclusion in sustainable finance

The panel discussion, moderated by Fiona Frick, Finance Advisory Board Member and Founding Partner at Circe Invest, examined how female voices are shaping sustainable finance, impact investing and fintech.

Lise Renelleau, Head of Research and Innovation for the IQ Lab at HSBC Asset Management, reinforced the importance of measurable impact. She expressed optimism that as access to high-quality data improves, ESG – once perceived as a top-down imposition – is increasingly being integrated into portfolio construction and reporting. While AI and advanced technologies can enhance data analysis, she stressed that human judgement remains essential in translating information into meaningful insight.

Kamini Banga, Chair of the Banga Family Trust, reflected on her experience working in India, where workplace equity was less established when she began her career. From identifying public healthcare investment needs in rural communities to overseeing family enterprise, she highlighted the importance of a just transition in emerging markets.

Zoe Jankel, Vice President and Senior Credit Officer at Moody’s Ratings, spoke about cultural change within organisations. She noted a shift away from expectations that women must conform to traditionally masculine leadership styles. Increasingly, authenticity is recognised and valued at senior levels.

The evening concluded with remarks from Lara Cathcart, Academic Director for MSc Finance and MSc Risk Management and Financial Engineering. Acknowledging the significant evolution in the finance industry, she reflected that there are still male-dominated pockets, especially at the senior leadership level:

“Representation is not simply about equity; it directly influences how capital is allocated, how risk is assessed, and how innovation is fostered. Through events like Women in Finance, ImperiaBusiness School reaffirms its commitment to advancing women across the financial sector, creating space for leadership, visibility and meaningful dialogue.”

Note: This article's headline was updated from: “Representation influences capital allocation” says Professor of Finance at ��’s third annual Women in Finance event on 05.03.2026.

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ImperiaBusiness School’s event showcased female leaders driving sustainable investing, ESG innovation and long-term value creation.

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How to market sustainability that actually converts

Eduardo B. Andrade — Wed, 15 Jan 2025 12:14:02 +0000

How to market sustainability that actually converts

Eduardo B. Andrade Wed, 15/01/2025 - 12:14

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24 September 2026

The Customer-Centric vs Nature-Centric Tension

In principle, consumers care about environmental sustainability. They want nature to be protected, and they often express strong pro‑environment attitudes. However, there is a wide gap between what consumers value in principle and what they do in practice. It’s not that consumers are disingenuous but it’s unfair to ask them to act sustainably if everything is playing against them. Accommodating the wants of the consumer with the needs of nature is our fundamental challenge in sustainable marketing.

The central flaw in traditional marketing is clear: we try to understand what consumers need, want, and wish, and then adjust our products, prices, promotional tactics, and distribution channels to satisfy them. This customer‑centric logic drives competitive success, but it often breaks down when sustainability enters the equation.

Our research shows most consumers emphasise price, functional quality, convenience, taste or visual appeal over eco-friendliness when making purchase decisions. Many don’t even think of environmental sustainability when making purchase decisions.

On top of that, there’s often a trade-off for the company, and consequently, for consumers: making a product more environmentally friendly usually means compromising elsewhere. It is an uncomfortable truth, but often, adopting a purely customer-centric view results in a company doing more harm to the environment.

Single‑use packaging is the classic example: consumers love the convenience and companies have given them what they wanted. But in doing so, we’ve placed a significant burden on the environment. Similarly, a sustainable product may not succeed beyond a niche market if following a nature-centric approach entails lower convenience, lower perceived quality, or higher price. So, can we offer a sustainable product that remains competitive on the other attributes, as well? The emerging field of sustainable marketing is all about acknowledging this trade-off and putting minds and money into turning the tension between what consumers want and what nature needs into a relationship that benefits both.

The role of governments

Government intervention is essential to ensuring companies compete fairly. Without it, firms that invest in sustainability risk being undercut by competitors who don’t.

Notpla, the seaweed‑based packaging company founded by former Imperiastudents, produces packaging that is not only more sustainable but also high quality, durable, flexible and convenient. But it isn’t the cheapest option in the market.

It’s tough to compete against plastic. The prices are very low, in part because the scale is enormous, but also because the environmental costs of plastic manufacturing and disposal are not being incorporated into the balance sheets.

"It is an uncomfortable truth, but often, adopting a purely customer-centric view results in a company doing more harm to the environment."

When governments tax more harmful packaging, as is now the case in the UK, it’s an attempt to level the playing field and allow companies like Notpla to grow faster. This illustrates why policy is crucial not only for consumers and companies, but also for removing the multiple systemic obstacles that prevent sustainable behaviour.

Despite recent political swings that have had a knock-on effect on sustainability policy, the shift in the past 18 months is in part down to the early hype and an oversimplified belief that consumer demand alone would drive change.

As climate impacts become more tangible – heatwaves, water scarcity, supply chain disruptions – companies will increasingly integrate sustainability out of economic necessity. Policy priorities fluctuate, but the current policy shift away from sustainability that we’re seeing in some Western countries isn’t here to stay. The reality of the situation will eventually impose itself – it’s already happening.

Giving consumers the right information

Another key obstacle to sustainable consumption is access to information. Consumers are often unaware of which option is more sustainable, or how much more sustainable one option is relative to the other. Eco-labels are a good starting point.

But, so far, eco-labels work on a voluntary basis, and, as a result, lack simplicity and standardisation. There are hundreds of types of eco-labels out there, which doesn’t necessarily make it easier for the consumer to choose the most sustainable product.

The next major shift in this space will likely come from the digital product passports now being rolled out across the EU. These will provide detailed environmental and circularity data, increase transparency across the value chain, incentivise manufacturers to improve sustainability performance and enable easier auditing by governments, NGOs, and competitors.

This could be transformational. A digital product passport would require consumers to scan the QR code to gather the information, and this, by itself, is a source of friction. But data availability and transparency are likely to encourage companies to offer products with lower environmental impact than the competition, and other actors, such as NGOs, to rank products on environmental friendliness. In short, the market will respond to the policy.

Tips for leaders

1. Adopt a dual mindset: customer‑centric and nature‑centric

Focusing on a customer-centric approach is not enough. Leaders must explicitly integrate environmental impact into product design, pricing, distribution and communication.

2. Build cross‑functional capability

Marketing teams must work closely with sustainability experts to understand the true footprint of products. Marketing research is as important as environmental research.

3. Diagnose the obstacles

Map the obstacles that prevent your customers from purchasing, consuming, and disposing more sustainably.

4. Identify and test tactical opportunities

Develop marketing tactics able to minimise or circumvent the key obstacles, and in doing so, promote sustainable consumption.

Ultimately, sustainable consumption won’t happen simply because consumers say they want it. It will happen when businesses, governments and marketers make sustainable choices more attractive – without asking consumers to meaningfully compromise on the things they value. The challenge for marketers is to find ways to make what is good for consumers and what is good for nature work together, rather than treating them as competing priorities.

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Consumers say they care about the environment, but their behaviour tells a different story. For sustainable consumption to become a reality, businesses need to rethink the fundamentals of marketing, argues Professor Eduardo B. Andrade.

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Are investors falling out of love with ESG?: Forbes quotes CCFI's Mike Wilkins

Evie Burrows-Taylor — Mon, 06 Jan 2025 10:38:43 +0000

Are investors falling out of love with ESG?: Forbes quotes CCFI's Mike Wilkins Evie Burrows-Taylor Mon, 06/01/2025 - 10:38

19 December 2024

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Does it pay to be a rule breaker in business?

Celia Moore — Wed, 27 Nov 2024 15:43:01 +0000

Does it pay to be a rule breaker in business?

Celia Moore Wed, 27/11/2024 - 15:43

28 November 2024

One of the first lessons we learn in life is not to break the rules – but new research from ImperiaBusiness School reveals there might actually be perks to being a rebel in the business world.

Though organisations and nations alike set rules in an effort to constrain our worst human tendencies, for as long as there have been rules, individuals have been breaking them. And it doesn’t take more than a cursory look at the news to see how self-proclaimed rule breakers can succeed: take, for example, the belief of Elon Musk, one of the world’s richest inhabitants, that “the only rules are the ones dictated by the laws of physics. Everything else is a recommendation”.

Once behaviour deemed "dodgy" is normalised, it’s extremely hard to get rid of it

Indeed, rule breaking can appear to be a mandatory part of business. Yet there has been almost no research on the benefits of breaking rules – perhaps because social science has a conscience, and has preferred focusing on the penalties it elicits rather than its rewards. For rule breaking to be as normative as it is, individual rule breakers need positive feedback. So, we conducted a study to look at whether managers reward and promote employees who flout rules – and how far that encouragement might stretch.

What we discovered is perhaps sadder than it is surprising: managers do give rule breakers preferential treatment over their rule-abiding peers, providing they don’t overdo it.

Rule breaking in sports

Given the difficulty of identifying rule breaking with certainty in real-world contexts, we looked at how coaches reward rule breaking in ice hockey. Sports data are detailed and precise – unlike in the corporate world where there is evidence that some try to hush up transgressions. Why ice hockey? Players frequently infringe sporting rules – we looked at nearly 214,000 incidents – and referees penalise players immediately. Culprits are removed from play for a while, with knock-on effects on their short-handed team’s performance.

Our research found no evidence that team performance improved as a result of rule breaking

Using detailed data gathered over six seasons from the National Hockey League, and conducting an additional experiment to confirm our findings, we discovered that those who break the rules are rewarded by their coaches with extra playing time over the season. This is despite the fact that taking penalties risks losses for their teams.

The one silver lining is that coaches have a tipping point: the most rampant offenders – those whose rule breaking forces them to sit out for significant periods – are rewarded less. Largely, this preferential treatment is most obvious in the games with relatively low stakes, rather than during games that were pivotal to their team’s fortunes. And it was the minor, rather than major, rule infringements that brought rewards.

Fostering a rule-breaking culture

Another experiment we conducted backed up our findings and gave more insight into managers’ motivations for this risky and potentially counterproductive behaviour. Moderate rule breaking appears to elicit attributions of a player’s grit and commitment. But extreme rule breakers – while also perceived as demonstrating commitment – were also considered more of a liability, and thus less likely to be rewarded.

For rule breaking to be as normative as it is, individual rule breakers need positive feedback

Our findings are both troublesome and reassuring. What is concerning is that they imply that organisations foster cultures of rule breaking – such that it becomes normalised in daily business. A cynic might conclude that managers condone rule breaking because they believe it will bring benefits for themselves. In our work, no managers were required to explain why they were rewarding rule breaking.

They had discretion to make the call without the need for justification. Research has already shown that once behaviour deemed "dodgy" is normalised, it’s extremely hard to get rid of it.

The results of bad behaviour

There are a few reasons to take heart. Our research found no evidence that team performance improved as a result of rule breaking – if anything, it declined in the teams we looked at, although we didn’t identify any causal link for this association. Organisations should also be wary when their performance is in decline: when a team in our sample is performing badly, managers become more likely to reward their rule breakers than when they are on a winning streak.

This fits with previous research that finds people are more likely to take risks and break rules in competitive environments. In these circumstances, managers might interpret a willingness to push boundaries as a sign of commitment to a company or campaign.

For as long as there have been rules, individuals have been breaking them

Our work asks as many questions as it answers. We’ve only looked at situations governed by clearly defined rules – but what if these are hazy or open to interpretation in less regulated environments? What about rule breaking that is only observed by a few – rather than being clear for all to see on the ice? What is clear is that rule breaking does seem to be enabled by the people in charge. We need to know more.

This article draws on findings from "A (Bounded) Preference for Rule Breakers" by S. Wiley Wakeman (Stockholm School of Economics), Philip Yang (Paderborn University Business School) and Celia Moore (��).

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What Japanese philosophy can teach us about finding purpose in the workplace

Frank Brueck — Wed, 05 Jul 2023 08:20:17 +0000

What Japanese philosophy can teach us about finding purpose in the workplace

Frank Brueck Wed, 05/07/2023 - 08:20

28 June 2023

Adapting leadership styles and organisational culture can help businesses and their employees find purpose – and have a positive impact on the world

The Great Resignation, quiet quitting, climate quitting, fury quitting. These buzzwords can elicit an eyeroll, but they reveal the unpredictable nature of the contemporary job market. Employees increasingly expect employers to make a positive economic, social and environmental impact on the world – and are willing to walk away if they don’t.

This is a positive trend, but how can you and your organisation find purpose in an increasingly complex market? I believe the answer lies in Japanese philosophy.

Finding ikigai

Outside Japan, ikigai, which translates as “your reason for being”, is mainly discussed in the context of personal development. I’ve set out to explore how its principles can be transferred to a business context, looking at how companies can reach a point where they have a purpose and impact society in a positive way – without compromising business success.

So, what does it mean to be an ikigai leader or even an ikigai organisation? According to my model and assessment tool, which look at how closely leadership styles and organisational cultures align with the philosophy, the following four characteristics should be integrated at the same time:

1. What you are good at: knowhow, capabilities, skills, talent
2. What you love to do: passion, motivation
3. What the world needs: positive social and environmental impact, sustainability, corporate responsibility
4. What you need for the market: business acumen, understanding the market forces

Only when all four are incorporated into business life, both for individuals and collectively, can ikigai be reached.

This model has already been applied in the Leonardo Centre on Business for Society and ImperiaCollege Executive Education’s Sustainability Leadership programme, which was awarded a prize by the Financial Times, ��’s Global Online MBA programme, and several leadership workshops and wellness programmes.

Value alignment matters more than ever before

Employees are no longer driven solely by financial motives. According to Deloitte, Gen Z employees value salary less than any other generation; given the choice of a boring job with a high salary or a more interesting role that doesn’t pay as well, Gen Z is fairly evenly split. Reflecting on the ikigai model can help employees better understand where they want to go and whether their organisation is helping them to achieve it, providing a valuable anchor when considering a career move.

Getting closer to a corporate culture based on a united purpose creates a more aligned team. This is all the more important when you consider Gen Z will account for 27 per cent of the workforce by 2025. If businesses want to attract and retain a new generation of talent, they need to demonstrate their commitment to people and the planet through concrete action.

Quitting isn’t always the answer

Often employees discover they can find a sense of purpose in the workplace by changing their organisation themselves. One ImperiaGlobal Online MBA student said: “For me, the introduction of the concept of ikigai was ground-breaking. For so long, I had chosen to look away and ignore how empty I felt. Today… I am finding purpose right where I am, I understand now that I have full control over my perspective. I am initiating projects at work that bring out my creativity and passion rather than waiting for an opportunity to simply arrive.”

Deciding to make changes to your organisation requires bravery, and for there to be a chance of success, the answers to the following questions should be “Yes”:

Do I have enough motivation and passion to do it?
Does it energise me?
Is it good for the world?
Will the company survive?

Identifying the missing piece in your organisation

At an organisational level, ikigai can provide a guiding light, help you to identify where you need to make changes and what is missing, whether it’s the business model, staffing, organisational structure, vision or the mission. Finding the purpose of the organisation, ensuring staff love what they do and are good at it, needs to be balanced with what the market needs to ensure the business remains profitable and can survive.

So far, only one of the more than 200 organisations that underwent an assessment has achieved an ikigai business model. AimHi provides accessible and engaging online climate training and education, with the aim of empowering everyone to be part of the fight against climate change. What sets the business apart is its passion for making the world a better place coupled with its ability to read and understand the market well.

The first ikigai organisation being a sustainability startup corroborates my original hypothesis: smaller and younger organisations are likely to come closest to achieving ikigai. This seems to be because it’s easier to set up new structures from scratch, while changing an existing organisational culture is possible but requires a longer process.

The search for other ikigai corporations is still on, but my goal is to use this model to help change the way we think about work – both from a leadership, as well as from a corporate cultural perspective – to make finding purpose a reality in business all over the world.

This article draws on “IKIGAI for Leaders and Organisations: The Way to Individual and Collective Purpose and Meaning” by Frank Brueck (��)

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