Question

4. In terms of sustainability, what influence do shareholders have on it on large business? (400 words)

Answer 1

It is important that the investors believe in the company and its management. Shareholders react to gossip, news and rumors. If they feel that a company is being mismanaged or trying a new strategy far outside the element of the company’s core business shareholders will run fast. This means selling the company’s stock.

Investors themselves may be interested in companies that work towards sustainability. Any effort to work towards sustainability can be seen very positively to potential investors. It may draw in more investments increasing the share price.

Even though the stock price is not really the best indicator of the company’s value especially in the short term the company must monitor the stock price with any news released that may appear negative.

I believe that the two biggest players in sustainability are government and consumers. Corporations indeed have a role to play as they have the ability to research and develop new technologies to solve issues but I believe it is the consumer that drive these changes. Corporations can lead the market but if the consumer is not ready to accept new ideas they will fail. Consumers are the ones that vote for corporations, and technologies by buying products and services. Consumers are also the ones that elect their government who both creates new regulations and enforces them upon corporations.

The truth is that all three groups influence each other. Corporations hire lobbyists to influence politician’s decisions which impact regulations. Corporations can also choose to lead the way by enforcing higher standards on themselves.

The government has the ultimate power but they serve the people (consumers). They create the regulations and enforce them. Government is usually slow to react and is behind especially with laws and regulations concerning new technology.

Government and corporations often work together to regulate industries. The leaders of industry usually end up being on regulatory boards that define the limits corporations must meet in order to be considered meeting environmental standards