Bayer Sustainable Development Report 2005 Prof. Rüdiger von Rosen

Prof. Rüdiger von Rosen

Significance of corporate sustainability activities

Prof. Rüdiger von Rosen, Managing Director of Deutsches Aktieninstitut e.V.

Information on corporate sustainability activities is becoming more important in equity analysis and attracting more attention from analysts. Besides, including non-financial risks greatly improves the quality of both corporate risk management and equity analysis. It therefore has a positive impact on the relationship between companies and their owners, the stockholders.

Various analyses have examined whether such qualitative improvements have a direct financial impact. Focusing on sustainability criteria does not automatically improve a company’s financial performance. However, it does generate an impressive improvement in its reputation, without adversely affecting its financial performance. That is a decisive factor from the investor’s viewpoint.

By addressing the wide-ranging, long-term aspects of sustainability and incorporating them into their strategy, companies like Bayer strengthen corporate risk management. Competent corporate governance is a key factor in investors’ decisions. Increased transparency also reinforces the relationship between the company and its investors. Companies that take a constructive approach to such challenges therefore deserve to be congratulated.