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Sustainable Investment Funds Can Encourage Worse Behavior

The Horizons Tracker

Subsequently, leveraging historical data, the researchers evaluated the responses of the highest and lowest polluting groups to fluctuations in their capital costs, an impact similar to the objectives of the sustainable investing movement. However, she believes that there are more direct methods of effecting change.

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Get the Strategy You Need — Now

Harvard Business Review

First, you don’t have a powerful strategy. The widespread absence of a powerful strategy is clear from our recent study of 3,000 of the world’s largest companies, which finds that just 20 percent in that group create 90 percent of its total economic profit. Retool your strategy development process. Test your new strategy.

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CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

Unless your company’s return on capital exceeds its cost of capital, no amount of revenue growth can create value. For the many firms whose cost of capital and return on capital are roughly equal, in fact, the only path to value creation is to increase return on capital.

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The Real Reasons Companies Are So Focused on the Short Term

Harvard Business Review

Investors punish companies with a short-term orientation by applying higher discount rates to them, which increases the cost of capital for those companies. In contrast, companies with a long-term orientation are rewarded with a lower cost of capital, which allows them to afford more innovation—a virtuous cycle.

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Why Traditional M&A Is Becoming Less Important

Harvard Business Review

Mr. Rockefeller’s business strategy was to vertically integrate every aspect of the oil business (exploration, development, logistics, marketing) to assure an ongoing competitive advantage. Sponsored by Accenture Strategy. His vehicles were not just mergers and acquisitions, though there were plenty of both along the way.

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The Case for Investing More in People

Harvard Business Review

.” There is a virtuous cycle between productivity and people: Higher levels of productivity allow society to reinvest in human capital (most obviously, though not exclusively, via higher wages), and smart investments result in higher labor productivity. Productivity in most developed economies has been anemic.

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How Banks Can Compete Against an Army of Fintech Startups

Harvard Business Review

And our analysis suggests there are strategies that they can use to compete successfully online. Banks’ cost of capital is typically 50 basis points or less. These low-cost and reliable sources of funds are from taxpayer-insured deposits and the Federal Reserve’s discount window. Eastern Bank).

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