In this study, we explore the organizational and performance implications for organizations that integrate (sustainability into their) corporate policies. Our overarching thesis is that such organizations represent an alternative and distinct way of competing for the modern corporation, characterized by a governance structure that in addition to financial performance, accounts for the environmental and social impact of the company, a long-term approach to maximizing inter-temporal profits, an active stakeholder management process, and more developed measurement and reporting systems…

All recipients of this Letter recently received a copy of our survey-based study on pension governance quality and long-term investing effectiveness. Its key messages were that many of the 81 pension organizations in the survey have some way to go in devising effective organizational governance and long-term investing processes. A hopeful finding was a positive correlation between perceived governance quality and long-term investing effectiveness. While these findings are material, they beg an important question: does better governance really lead to better organizational outcomes over the long-term? The stronger the evidence that this is actually the case, the stronger the case that pension organizations and their stakeholders should actively work to raise the effectiveness of their governance processes. They would have a clear fiduciary duty to do so.