Submitted by World Economic Forum
Developed by the World Economic Forum’s Global Corporate Citizenship Initiative (GCCI) in partnership with the International Business Leaders Forum (IBLF), the report explores how chief executive officers (CEOs), chief financial officers (CFOs) and investor relations officers (IROs) communicate the strategic importance of the social and environmental aspects of their firm’s performance to investors. It examines how these companies are articulating both the business case and the “leadership” or “values” case for global corporate citizenship, highlighting some of the challenges of communicating often intangible but nevertheless quite relevant issues to owners.
“We see increased interest in the social and environmental aspects of corporate performance by pension funds, insurance companies and other shareholders. Investment analysts, trustees and portfolio managers appear to be taking these issues more seriously than they were just a few years ago,” said Richard Samans, World Economic Forum Managing Director, who added, “2004 might just be the year corporate citizenship comes of age in the mainstream investment community.”
The report, “Values and Value: Communicating the Strategic Importance of Corporate Citizenship to Investors,” is based on CEO, CFO and IROs’ responses to a written survey and set of personal interviews, conducted primarily with executives in signatory companies of the World Economic Forum’s Global Corporate Citizenship Initiative. Although this initiative represents a small and self-selected group of companies, they offer perspectives from 14 different industry sectors with headquarters in as many different countries. Some of the key messages are reinforced by the findings of research conducted by SAM Sustainable Asset Management in 2003, covering over 1,000 companies, and the findings of several global, European and American surveys of institutional investors – each covering over 400 investors – which are listed in the footnotes.
Marilyn Carlson Nelson, Chair and Chief Executive Officer of Carlson Companies, USA, and a Co-Chair of the World Economic Forum’s Annual Meeting 2004, comments: “This Global Corporate Citizenship Initiative report provides interesting and encouraging insight into how the corporate community communicates the strategic importance of their corporate social responsibility (CSR) activities to the investment community, and the growing interest by investors in factoring a corporation’s CSR activities into investment decisions. This phenomenon has taken hold particularly in Europe and will, I believe, become of increasing importance to mainstream investors in the US and the rest of the world.”
Based on this analysis and the experiences recounted directly by many of the CEOs and CFOs questioned, the report makes note of a number of effective practices and offers a set of recommendations for those seeking to communicate the importance of corporate citizenship to shareholders and investors. The report comes as the World Economic Forum prepares for its Annual Meeting 2004 in Davos. Under the theme “Partnering for Prosperity and Security” the report will be used to inform and illuminate sessions on corporate citizenship at the Meeting.
Key findings from this in-depth survey of CEOs include:
1. Signs of change in the financial sector: In a limited, but interesting number of cases, during 2003 some of the world’s major institutional investors started to flex their muscles on issues related not only to improved corporate governance and ethics, but also broader issues of corporate citizenship. At the same time, the Socially Responsible Investment (SRI) movement, while still representing a tiny percentage of global funds under management, continues to grow in terms of size, sophistication, geographic scope and influence.
2. Obstacles to overcome: The CEOs, CFOs and IROs surveyed by the World Economic Forum identified five interrelated types of obstacles to mainstream investors showing more interest in how corporations address the risks and opportunities related to corporate citizenship:
Companies contributing to the report on Corporate Citizenship* are the following:
Anglo American Plc
Arthur D. Little
Carlson Companies Inc.
The Coca-Cola Company
Deloitte Touche Tohmatsu
Merck & Co. Inc.
Pakistan State Oil Company
Phillips-Van Heusen Corporation
Rio Tinto Plc
RWE Thames Water
*The companies contributing to the report on Corporate Citizenship do business in 14 sectors: banking; clothing and footwear; conglomerates; construction; electronics; food and beverage; insurance; logistics and transportation; mining and metals; oil and gas; pharmaceuticals; professional services; travel and tourism; utilities. The companies are headquartered in 14 countries: Belgium; Chile; Egypt; France; Germany; India; the Netherlands; Norway; Pakistan; the Philippines; South Africa; Switzerland; UK; USA.
GCCI Background Information
Launched in July 2001, the World Economic Forum's Global Corporate Citizenship Initiative (GCCI) is working to increase business engagement in corporate citizenship. Believing that companies can gain from sharing experience and best practice in corporate citizenship as well as exploring common areas of interest, the GCCI is collaborating with companies to advance the agenda of corporate citizenship on a global as well as regional level. Using the Forum's Annual, Regional and Governors’ Meetings as platforms, initiative members exert thought leadership and expand the market for enlightened corporate citizenship in cooperation with experts and other organizations around the globe that specialize in corporate responsibility. Today, more than 40 companies representing a variety of regions and sectors are engaged in the initiative.
For further information on the Global Corporate Citizenship Initiative, the report and the initiative’s CEO Statement, please contact Caroline Bergrem, Project Manager GCCI, at firstname.lastname@example.org
The World Economic Forum is an independent international organization committed to improving the state of the world. The Forum provides a collaborative framework for the world's leaders to address global issues, engaging particularly its corporate members in global citizenship. Incorporated as a foundation, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. The Forum has NGO consultative status with the Economic and Social Council of the United Nations. (http://www.weforum.org).
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