When it comes to a company practising good green governance, it is not about being altruistic. It is also not just about improving the company’s risk management, as a risk management program is seen as a cost to a company (albeit a justified and worthwhile cost). Greening can lead to savings for a company (e.g. reduction of energy consumption, raw materials, water, etc.). Far from being a cost factor, good green management can directly contribute to a company’s bottom line and increase profitability.

But how can an investor know if they can attribute this profitability to green practices? Without digging through a company’s financial statements and sustainability reports, one might assume that profits come solely from a superior product or service, effective advertising, or something else. How can a company best demonstrate to a broad audience that its good green governance has contributed to its profits?

In a recent article Shelley Goldberg explores the question of what green governance actually describes and looks at various aspects of ESG practice that might provide answers.