By Matt Van Tassel, Business Wire
Corporate Social Responsibility (CSR) has transformed from business movement to business process.
Individual and institutional investors not only want to know that your company is profitable; they also want to know that a company is operating responsibly. Global stock exchanges and regulators are also taking a harder look at how companies operate within the context of society.
The changes resulting from the CSR movement could not be any clearer: corporate social responsibility is here to stay, and by beginning to implement components of sustainability into business practices, companies can benefit from risk management and competitive advantage perspective.
Don’t believe us? Below are several relevant points showcasing the significance of CSR and how having a well-promoted CSR program in place will not only benefit your company’s brand, but potentially your company’s bottom line too.
- Sustainability is going mainstream and investors do care.
PricewaterhouseCoopers surveyed a mix of institutional investors to see how sustainability enters into their investment decisions. The key takeaways: first, companies that have sustainability efforts in place are looked upon as investments with a lower risk profile. Second, there is a lack of information, specifically in the U.S., regarding sustainability reporting, and therefore those who do report have a unique opportunity to stand out. To view the survey, click here.
- Stock exchanges are weighing in as well.
Ceres, one of the leading advocates for sustainability business practices, put together a proposed listing standard, based on feedback from both institutional investors and stock exchanges. The proposal is a three-part rule: 1) Assess CSR factors material to the company’s business, 2) Provide disclosures on ten CSR issues (such as environmental impact, diversity and human rights), and 3) Supply a link to where the company’s CSR data resides on its Web site. To see the proposal, click here.
- SEC checks in on Corporate Social Responsibility Reporting.
Davis Polk’s Betty Moy Huber, co-head of their Environmental Group, crafted a memo on the SEC’s willingness and interest to integrate CSR reporting into its disclosure requirements. As the SEC is working toward revamping Regulation S-K disclosure requirements, this would be an excellent opportunity to formalize CSR requirements for public companies. To view her memo, click here.
- Corporate Social Responsibility is a global concept, and Europe is leading the pack.
Many consider Europe to be at the forefront of mandates for CSR reporting. This last April, the European Parliament adopted the Directive on the disclosure of non-financial and diversity information by certain large companies. This directive will require EU companies to report on environmental, social and other CSR matters as well as how their business model is affected by these policies. To view links to the directive, click here.
- But don’t investors only care about short-term results? Technically yes, but they can be swayed.
While short-term investing is prevalent in today’s markets (and will continue to be so in the foreseeable future), Global Compact LEAD and Principles for Responsible Investment (PRI) have built a roadmap to turn the tide. One of the true keys to solving this puzzle is identifying and effectively communicating the benefits of CSR strategies for both short-term and long-term investors. To view their joint report, click here.
- Investors are recognizing returns on socially responsible companies.
More and more investors are looking beyond balance sheets when deciding where to place their assets. With one out of eight professionally managed U.S. dollars invested in socially responsible funds, you can be assured there is a benefit in becoming increasingly socially responsible. To view alternative energy investment company Mosaic’s article, click here.
- Companies must take a long-term approach and properly communicate CSR efforts.
Once your company has decided to make CSR reporting a greater priority, getting the initiative started takes some consideration. Dix & Eaton’s Stephanie Harig offers some excellent tips on communicating your company’s CSR efforts, like identifying which department will own this initiative and finding the social responsibility issues that are material to your company’s business model. To view the article, click here.
Investors not only want to know that your company is profitable — they want to know your company is doing good. By being proactive and implementing a CSR policy, you can help solidify your company as a standard bearer in your respective industry. And what better way to get the word out than a press release? Marketing your CSR-related initiatives via a branded press release is one of the easiest and most cost-effective ways to promote your company’s best practices.
Want to learn how you can initiate a communication program designed to highlight your CSR program? Drop us a line — we would love to talk. We work with many companies to successfully promote CSR programs to a wide range of relevant audiences such as SRI fund managers, NGOs, academics, CSR-focused journalists and like-minded company decision makers.