Responsible Business Guide: A Toolkit for Winning Companies

RBG
Responsible Business Guide: A Toolkit for Winning Companies
Why Being Financially Viable Comes First
When a company’s turnover is sufficient to enable it to meet its operating costs, allow for
investments in development and technology, settle outstanding payables, maintain or
increase levels of production or service delivery, and on top of all this leave a reasonable
margin of profit, it is said to be financially viable. Accountancy norms suggest that this
picture of financial viability comes in yearly cycles. In reality, however, companies must
remain viable over much longer timelines to be successful.
Major SRI Indexes
Dow Jones Sustainability Index
Ethibel Global Index
Ethical Global Index
FTSE4GOOD Global 100 Index
Humanix 200 Global
Natur-Aktien-Index
ASPI Eurozone Index
Ethinvest Environmental Index Australia
Westpac-Monash Eco Index Australia
Jantzi Social Index Canada
UmweltBank-Aktien Index Germany
Morningstar Japan SRI Index
JSE / FTSE 4Good Index South Africa
Humanix 50 Index Sweden
Calvert CALVIN Social Index USA
KLD Domini 400 Index USA
Prevailing wisdom shows that the break-even point for
a business determines its trajectory of success over the
long term. In the current environment, this break-even
point is determined by more than just the ability to pay
bills. Observers, particularly those who measure
sustainability indicators, look at a company’s societal
footprint to predict success. Assessing a company’s
financial viability has become a complex, multifaceted
task.
This typically involves going beyond traditional evidence
(such as audited accounts and financial performance
statements, budgets, business strategies, growth
projections, etc.) to look at newer indicators such as the
environmental footprint, adherence to labor laws and
health and safety regulations, employee benefits, credit
ratings, and records of litigation. The picture that emerges
indicates whether or not a company is financially viable.
Inherent in this picture is the assumption that a company that is disciplined and prudent
to stay financially viable is a company that can fulfill its obligations to its customers,
employees, and governments. In recent years, efforts by regulatory agencies and tax
authorities in Pakistan suggest a further tightening of controls for assessing a company’s
long-term financial health. Matched with its ability to manage risks through the creation
of liquidity mechanisms, assets, and social capital in the form of credit, a company further
indicates its sustainability.
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Responsible Business Initiative