How does a company’s operations contribute to environmental issues?
Lack of care to the environment and failing to comply with environmental regulations poses a threat to society and a company’s success and operations. Examples include how a company is dealing with an oil spill, deforestations, the management of toxic greenhouse gas emissions from factories, and pollution into the local environment.
Case Study: Dunkin’ Donuts (DNKN)
Dunkin’ Donuts announced that they will eliminate foam cups worldwide by 2020, replacing polystyrene cups with a new double-walled paper cup. The company’s new paper cups will be phased in starting Spring 2018 in New York City and California as its U.S. suppliers ramp up production. The company’s stock immediately rallied up over 10%, supporting our proposition that ESG investing reduces risk and enhances odds of profitability.