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Investor Interest in Corporate Social Responsibility on the Rise

Submitted by: CSREurope

Categories: Corporate Governance

Posted: Mar 24, 2003 – 11:00 PM EST

 

Investor relations act as a catalyst for social and environmental change

Mar. 24 /CSRwire/ - Brussels – Corporate social responsibility (CSR) can help companies gain a competitive advantage in attracting investors and offer excellent risk management strategies, say a majority of investor relations professionals at Europe’s leading companies. A new CSR Europe/INSEAD study, carried out in cooperation with the Investor Relations Society, also suggests that the interest in social and environmental issues has risen significantly over recent years and that investors are beginning to ask more informed and detailed questions about companies’ corporate social responsibility performance.

The study, entitled “Corporate social responsibility and the role of investor relations – from switchboard to catalyst”, features interviews with investor relations and corporate social responsibility experts from twenty leading European companies . It reveals that the awareness of social and environmental issues among investor relations professionals (IROs) is much higher than previously thought.

In particular, the study focuses on the much more proactive approach that investor relations departments at companies such as Volkswagen and BT are displaying towards investors in bringing CSR issues to the forefront of the investment world. IR officials interviewed said that they are seeking to help investors better appreciate the business value of responsibility strategies. No longer performing a mere switchboard function between investors and environmental or CSR departments, these dedicated IR officials are effectively becoming a catalyst for corporate social responsibility by galvanising investors’ interest in these issues.

Interviewees also predicted that the traditional financial community (in particular the pension fund industry) is likely to come under more pressure to recognise the impact of social and environmental issues on the company value. Almost all IROs said they expect mainstream investors and analysts to increasingly integrate social and environmental criteria into their assessments - but only gradually. Some were looking at a timeline of four to five years.

“Investors see corporate social responsibility as a major indicator for a firm’s exposure to non-financial risk, but they don’t fully understand a firm’s true social perfomance. Investor relations has emerged here as a missing link; providing much more than just the last finacial results, IR officers are playing a pivotal role in helping investors appreciate the business case for social responsibility and its practical effect on firms’ perfromance,” says Dr. Kai Hockerts, Research Programme Manager at INSEAD’s Centre for the Management of Environmental Resources.

“It is clear from this study that investor relations professionals are taking CSR issues increasingly seriously. This report provides some valuable insights into the communication between companies and various market participants over CSR and will be important reading for investor relations professionals”, said Andrew Hawkins, Chief Executive of the Investor Relations Society

“These companies are actively demonstrating to investors that corporate social responsibility makes good business sense, and the firms are already seeing the benefits it can bring them in terms of risk management and attracting investment”, said CSR Europe’s SRI Coordinator Adeline Hinderer.

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Notes for Editors

1. Copies of “Corporate social responsibility and the role of investor relations – from switchboard to catalyst” cost €60 and can be ordered online at www.csreurope.org.

2. This report is a result of CSR Europe’s programme on “Socially responsible investment”. The programme was launched by CSR Europe member companies to promote dialogue and cooperation between companies and investors, and to encourage the development of SRI products.

3. CSR Europe is a business-driven membership network whose mission is to help companies achieve profitability, sustainable growth and human progress by integrating corporate social responsibility into the mainstream of business practice. Founded in 1995 by former European Commission president Jacques Delors, CSR Europe is regarded as the top CSR expert by European institutions.
Through its 60 company members, 17 national partner organisations, topical benchmarking programmes and online resource center (www.csreurope.org), CSR Europe has become the major European reference point on corporate social responsibility strategies and practices for companies.

4. The Investor Relations Society is Europe’s leading professional body for investor relations practitioners. Its mission is to promote excellence in investor relations and enhance corporate value through effective communication. It provides annual events, representation on regulatory bodies and working partners, input on consultation and documents, and information and advice. The IRS also offers an extensive professional development programme and has introduced the UK’s first investor relations qualifications.

5. INSEAD is widely recognised as one of the world’s largest and most influencial graduate business schools. Faculty members teach more than 720 MBA students, 6000 executives and 50PhD students from over 75 countries per year. INSEAD’s Centre for the Management of Environmental Resources (CMER) is a specialised research and teaching facility. Since 1992, the centre has carried out an active programme of research partially funded by industry grants, the European Union and other sources

For more information, please contact:

Nicki Bennett CSREurope
Phone: +32 2 541 1623

 

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