The dust of the recent economic implosion has yet to settle. Capital assets and fortunes have been dreamed up, liquidated and lost more times than any industrial-size paper shredder can handle in a lifetime. For years to come, analysts and investors will bear the burden of having ignored the high debt loads of many of the now-fallen giants of technology, and former executives and employees of now-defunct companies will continue to battle in the courts. CEO tenure has gone from eight years in 1980 to four years in 2000,1 even as the media and the public have hotly debated whether corporate returns have kept up with hyperbolic CEO pay.2 Meanwhile, the number of business failures has increased — more than 80,000 company failures per year in the last 20 years, compared to 19,000 per year, on average, in the previous 30 years.3,4 And corporations seem less and less able to predict their true earnings.5
Not surprisingly, in this environment investors and other corporate stakeholders have begun to take a keen interest in the sustainability of businesses. Witness the growth of socially responsible investing, where economic as well as social and environmental goals drive investment decisions. Although analysts may not always speak the language of sustainable development, Wall Street is gradually... To read the complete article, login or sign-up using the form below.
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