Chapter 10: Sustainability as Strategy: The Financial Performance of UN Global Compact Network Australia (UNGCNA) Member Firms on the Australian Securities Exchange (ASX)

This study assesses the impact of corporate engagement in sustainability and ethical practices on shareholder returns as defined by participation in the UN Global Compact Network Australia (UNGCNA). A dataset of 60 UNGCNA participating companies was compared to a similar set of 60 non-participating companies from the Australian Securities Exchange. The UNGCNA participating companies are also considered against the All-Ordinaries Index, which includes the top 500 listed companies in Australia, which is the country’s oldest market index and is often used as a benchmark. We analyse the growth in total enterprise value or market capitalization over three years. The findings reveal a significant positive differential in shareholder returns for UNGCNA participants against both comparison groups. Sustainable business practices may explain the differential or, more likely, these companies have an overarching management approach or style that sets them apart, and this approach includes the pursuit of sustainable performance.