Danone CFO Stresses Financial Returns as Key to Sustainable Investment
Source: The DairyNews
Danone's Chief Financial Officer, Jurgen Esser, has emphasized that sustainability initiatives must generate financial returns to successfully attract investors, marking a shift from typical industry perspectives. While sustainability efforts are often highlighted for their environmental impact, Esser's remarks highlight a pragmatic approach to green investments.
Unlike other industry executives who have prioritized environmental goals over financial outcomes, Esser advocates for sustainability strategies that also deliver economic benefits. He noted that Danone has revamped operations at its facilities to reduce energy usage, a move that has not only decreased costs but also provided substantial financial benefits to the company, although specific details were not disclosed.
Moreover, Esser pointed out the competitive advantage gained fr om these sustainability efforts, stating, "It allows us to meet customer demands for lower carbon products, effectively reducing emissions by 20% in some cases."
The push for sustainability is increasingly influencing third-party supply chains, wh ere companies like Danone are urging suppliers to align with ambitious environmental targets. This is especially critical as businesses across various sectors, from retail to hospitality, strive to reduce their scope 3 emissions.
However, Esser argues that attracting investment in sustainability requires making these initiatives financially viable. "Without a competitive edge, sustainability investments will not appeal to investors who are looking for returns," he added.
Supporting Esser’s perspective, Robert Schramm-Fuchs, a portfolio manager at Janus Henderson, agreed that sustainability must have a positive commercial impact to be truly viable. He cautioned, "Actions that place a company at a competitive disadvantage will only lead to market share loss, negatively affecting employees and other stakeholders."
Danone is set to further discuss these strategies and more during its investor conference in Amsterdam, aiming to deepen shareholder engagement on its sustainability commitments and their financial implications.
Moreover, Esser pointed out the competitive advantage gained fr om these sustainability efforts, stating, "It allows us to meet customer demands for lower carbon products, effectively reducing emissions by 20% in some cases."
The push for sustainability is increasingly influencing third-party supply chains, wh ere companies like Danone are urging suppliers to align with ambitious environmental targets. This is especially critical as businesses across various sectors, from retail to hospitality, strive to reduce their scope 3 emissions.
However, Esser argues that attracting investment in sustainability requires making these initiatives financially viable. "Without a competitive edge, sustainability investments will not appeal to investors who are looking for returns," he added.
Supporting Esser’s perspective, Robert Schramm-Fuchs, a portfolio manager at Janus Henderson, agreed that sustainability must have a positive commercial impact to be truly viable. He cautioned, "Actions that place a company at a competitive disadvantage will only lead to market share loss, negatively affecting employees and other stakeholders."
Danone is set to further discuss these strategies and more during its investor conference in Amsterdam, aiming to deepen shareholder engagement on its sustainability commitments and their financial implications.
