One of the main bottlenecks for reorienting business cases by incumbent organizations is the possible (and probable) reduction of profits and thus value for shareholders.
Are there any papers how incumbent firms successfully deal with shareholders (initially) opposing their business reorientation towards long term sustainable development?
Rob Lubberink, These two words Convincing & persuading shareholders are very much important for Business. I think convincing people are more tactful than persuading ones. So, you have to be more cautious about convincing people.
Nowadays, concern for shareholders must be enriched in equal (if not even greater) measure by concern for stakeholders. From that standpoint, I would suggest:
- Enchantment: The Art of Changing Hearts, Minds, and Actions (Kawasaki, 2011)
- Practical People Engagement: Leading Change Through the Power of Relationships (Mayfield, 2013)
- Project Management Communication Tools (Dow & Taylor, 2015)
- Message Not Received: Why Business Communication is Broken and How to Fix It (Simon, 2015)
- The Project Managers Little Book of Cheats (Spriggs, 2016)
Hi Rob, lovely question. If businesses have to deal with shareholders rejection, then there was no or not enough materiality carried out by the organization to feel the pulse of its "stakeholder". You can have a look at the book and web page. Hope this helps
Aston,J. and Knight, A. (2014) Smart Engagement: Why, What,Who and How.
Nudging people towards Sustainability-
https:theguardian.com/suatainable-business/nudging-people-suatainability-local-choices
I am sorry I cannot give objective contribution to your question. I would start adding to your concern the "new wave" of ESG that is blossoming and whether ESG indicators could help to convince shareholders. Also, whether unstructured data about environmental and social disruption could or not produce similar effect.
Thank you all for your replies. Perhaps to add a bit more detail to my question, I'll explain where it comes from. Most pathways to transition to sustainable economies in the end will reduce the profits of companies. Costs that are now still externalized will need be internalized in prices (damage to environment and society). In general creating environmental and social impact (or reducing damage) reduce profit for a company. And that's where the crux is for most sustainability pathways, shareholders may keep a company hostage.
The problem is not that environmental and social impact cannot be financially viable, it is just that these come at the cost of the total profits and the dividend. The former CEO of Danone for example got kicked out because he was too much focused on the environmental impact of the company. So even if the company wants to become more sustainable, it can be hostage to its shareholders. How can companies make sure that they can convince shareholders that it is not only about profit but also about the legitimacy to operate in a world where climate change is not a future phenomenon anymore.
Hi, Rob, I wonder how are your research on this topic because I am being asked by students about similar aspects. Mainly, about the true, real impact of ESG in business, whether share and stakeholders will accept to afford initial financial losses, or afford medium or even long time losses to have a significant sustainable change later on.
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