Socially responsible investment

Corporate environmentalism is an evolving concept for environmental protection. In this case, business takes a pro-active stance independent of regulatory authorities. This can be in recognition of social responsibilities, but is more successful when compelled by competition in the market place. Thus, a hrm can conscientiously target environmentally aware consumers (through marketing environmentally friendly products or processes) or can be better placed for hnancial support from ethical investment funding bodies. 

Proliferation of Corporate Social Responsibility and Socially Responsible Investing (CSR/SRI) standards and the compliance with key standards as a requirement of doing business. 

Today, leadership companies are expected to respond to a proliferation of corporate social responsibility (CSR) and socially responsible investing (SRI) standards. Leading companies report not just their return to shareholders but also their return to stakeholders. But with more than a dozen major standards organizations - each representing a variety of stakeholder perspectives - and even more questionnaires for reporting on CSR/SRI accountability and sustainability practices (see the Standards Directory Appendix Item A), how should a company approach this emerging field And, even more critical for the business bottom line, what strategic opportunities are indicated ... 

Evolution of Costs. From a sustainability perspective, the TCA methodology should account for both internal corporate costs and societal costs. In the conventional business model (Fig. 6.12a), a company invests on a project when the projected revenues are greater than the projected costs to the company. However, to reflect environmental stewardship and social responsibility, a truly sustainable company should make considerations beyond the conventional business model... 

In Europe, calls for increased disclosure got a boost in 2001 when the Association of British Insurers (ABI), a 400-member trade association of Britain s insurance industry, issued new guidelines. The ABI members account for more than 20 percent of stockmarket investment in London. These guidelines ask companies to disclose information about the social, environmental, and ethical risks and opportunities they face and how they plan to handle them. ABI officials say the guidelines represent an important opportunity for investors and companies to work together both to protect shareholder value and improve their understanding of corporate social responsibility (see www.abi.org.uk). 

SRI) Social Investment Forum, Report on Socially Responsible Investing Trends in the United States, SRI, Washington, DC, 2003. 

Special Features Human rights, product safety, environment, community relations, and corporate governance. This is one of the best-known socially responsible investment funds in the United States. 

Users Religious and socially responsible investors use ICCR to guide investment decisions media and activist stakeholders use their information on corporate... 

The CERES coalition, based in Boston, Massachusetts, was formed in 1989. It brought together 15 major US environmental groups, an array of socially responsible investors and public pension funds representing US 150 billion in invested capital, together with more than 200 Protestant denominations and Catholic orders. 

Reinvest in well-researched, socially responsible investment avenues when it comes to that time when your business is making enough money that you can afford to save some of it. 

Clement-Jones, T. (2005). Corporate social responsibility Bottom-line issue or public relations exercise InJ. Hancock (Ed.), Investing in corporate social responsibility. A guide to best practice, business planning the UK s leading companies (pp. 5-14). London, England Kogan Page. 

In 1990, Domini Social Investments and Kinder, Lyndenberg, Domini Co. (KLD) created the Domini 400 Social Index (DS400) - the first socially responsible investment benchmark - to measure how social and environmental screens affect investment performance. 

Under the generic name of socially responsible investment, there are actually a multitude of different philosophies ethics, sustainable development, materiality of extra-financial factors, etc. These various approaches differ as regards both the criteria and analytical tools used to assess corporate behaviour and performance, and the techniques used to build portfolios. 

Even though the term Socially Responsible Investment covers many different approaches, it is useful to adopt a general definition ... 

Socially Responsible Investment (SRI) can be defined as the process by which factors other than standard financial ones are affecting investment decisionmaking and ownership practices. 

The evolution of assets imder management in socially responsible investment presented in the previous chapter is accompanied by and probably also - at least to some extent supported by an institutionalization and a mainstreaming of such practices. 

Since July 2000, the Trustee Act requires all pension fund trustees to disclose their pohdes on socially responsible investment. 

Since January 2002, the new pension law requires private and corporate pension schemes to disclose their policies on socially responsible investment. 

Since February 2001, the French law on Employee Saving Plans requires mutual funds, which collect money from the Employee Saving Plans, the Inter-companies Saving Plans and the Voluntary Partnership Employee Saving Plans, to report on their policies on socially responsible investing. 

From a niche market socially responsible investment as an integrative approach (integration of ESG issues with industrial analysis and valuation on a sector-by-sector basis to identify [mid- and long-term] investment opportunities) has now definitely entered the mainstream arena,with a particular focus on the link between ESG issues and financial performance. 

C. Butz and O. Pictet, The SRI Performance Paradox - How to Gauge and Measure the Extra-financial Performance of Socially Responsible Investment, Pictet Cie, Geneva, May 2008, www.pictet.com. 

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