Assessing the business case for environmental, social and corporate governance practices in South Africa

William Ford Junior (Ford Motor Company 2010) remarked that ‘creating a strong business and building a better world are not conflicting goals; they are both essential ingredients for long-term success’. His quote underlines the importance for managers and directors to consider simultaneously pertinent sustainability issues while striving to build successful businesses. The concept of sustainability is of particular importance to investors who engage in responsible investing (RI) (Van Der Ahee & Schulschenk 2013). Such investors incorporate environmental (E), social (S) and corporate governance (G) aspects in addition to risk-and-return considerations when assessing investee firms (Pasquini-Descomps & Sahut 2013). The inclusion of non-financial information in addition to corporate financial performance (CFP) broadens the scope of investment analysis and decision making (Bassen & Kovács 2008; Eccles et al. 2007; Pasquini-Descomps & Sahut 2013). Responsible investors acknowledge the potential positive and long-term impact of sound ESG risk management on CFP (Van Der Ahee & Schulschenk 2013).