If you're interested in investing, but are reluctant to fund companies whose practices you disagree with (either on moral, ethical, or environmental grounds), it's probably worth pointing out to you that you have options. And those options are related to the concept of Socially Responsible Investing, or SRI. Portfolio managers that are involved in SRI (also known as green portfolio managers) tend to direct the funds that they're managing toward competitive public companies that are meeting a certain number of conditions that have been previously set and depend largely on the particular firm's ideals. Most of the time, the criteria include companies that are building a more bio-sustainable human economic infrastructure based on renewable energy, energy …show more content…
On the international scene, socially responsible investing (SRI) is growing at the healthy clip of more than 10% per year. If you take a look at most SRI portfolio managers and the strategies they use, you'll see that they put in place screens that eliminate publicly-traded companies that produce "bad things", which are products and/or services that are deemed undesirable (alcohol, tobacco, weapons, pornography, and pollution). SRI portfolio managers also use other screens that check for a company's record on human rights, women's rights, worker rights, animal rights, and so on. Thankfully, out of the myriads of companies out there, there are some that can meet a socially responsible investor's desire for healthy financial returns, while at the same time protecting the environment and building an environmentally sustainable economic infrastructure. For example, renewable energy is one of the sectors growing at a torrid pace right now. While its rate of growth is hovering around 25% per year in the U.S., it is even greater in the European Union and parts of
In most cases, profits and social welfare are at odds. In such a case, business executives being answerable to shareholders are likely to focus on the profit-making aspect of the business rather than going against the interest of their shareholders by promoting social welfare at the expense of profits. In addition, research shows that companies actively involved in Corporate Social Responsibility efforts are more likely to be targeted by activists (Kress, 2011). In fact, it has been established that many companies initiate corporate social welfare projects when they stand to gain from those projects. For example, automakers resulted to creating fuel-efficient vehicles when they became profitable; similarly, energy conservation became an important CSR activity when the cost of energy became very costly. As such, the companies are benefiting their society as they follow their own
Barclays plc: Socially Responsible Corporate Behaviour How does Barclays plc fulfil its obligations to their stakeholders in terms of ethical business practice and socially responsible corporate behaviour? According to The Institute of Business Ethics (cited in MORI, 2003), “80% of the public believe that large companies have a moral responsibility to society but 61% also thought large companies don’t care”. Why this shocking conclusion? Due to major accounting scandals such as Enron and WorldCom the public’s confidence in organisations have decreased.
The article, “U.S. Economy slows down; Europe is on the Upswing,” shows that Europe will catch up to the United States in no time. According to The New York Times, the unemployment rate for European Union drop from ten percent to 8.7 percent in less than ten years; that is a growth of 2.3 percent. European markets have become more open and competitive and European companies have follow many Americans practices to help deliver better performance. European governments are lowering taxes, at least modestly. Wage increases have slowed to a edge and labor markets have become more flexible, as companies evade traditional job protection rules by hiring part-time and temporary workers.
Corporate Social Responsibility (CSR) is a word that is bandied about with really little regard as to what the full implications actually are. Consider a few thoughts: What exactly is a corporation’s responsibility? Who are the arbiters of CSR for corporations? What does it cost to “rein in” corporations? Why are some companies held to a different standard than others?
Flammer, C. (2013). Corporate Social Responsibility and Shareholder Reaction: The Environmental Awareness of Investors. Academy Of Management Journal, 56(3), 758-781. doi:10.5465/amj.2011.0744
Patagonia is such a company that is strongly motivated in improving the health of the planet. Here is a summary of some environmental work from Patagonia : • $6.6 Million donated for environmental work • 770 environmental groups received a grant in 2014 • 10 fair trade certified styles in the Patagonia line • 100% of Patagonia’s products are taken back to be used for recycling • 100% of traceable down (traceable to birds that were never live –plucked, never force-fed ) • 136 employees volunteered in the year 2014 through their environmental internship programme (the company offers the employees the opportunity to spend up to two months away from their regular roles, to work for the environmental group of their choice while continuing to earn their pay check and benefits ) • 726,404 single – driver car trip miles avoided this year through their drive- less programme • 1 % for the planet (since 1985 Patagonia gives away 1 % of the company’s profit to organisations that are engaged environmentally ) these information’s where taken from Patagonia’s Environmental &social initiative report
Impact Investing is part of a trend of concepts that aimed to review the way people were investing their money. The idea of harnessing the power of the market in alignment with investor values dates back to the 19th century, when religious institutions sought to avoid investing in "sin" stocks, such as tobacco or alcohol industries. In the modern times, we can see the environmental and anti-apartheid movements in the 70’s as the return of these values. It was also in the 70’s that the concept of Social Responsible Investment (SRI) emerged. SRI was the inclusion of social and environmental variables besides financial return in the investment decisions. The idea was to avoid companies that could harm the environment or that could behave in unethical
Corporate Social Responsibility (CSR) is the way a corporation achieves a balance between its economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations. In general, when firms hold this wider encouraging role on the public by being engaged with stakeholders, a variety of profit can be produced for both company and the stakeholders. A key inclination is the combination of Corporate Social Responsibility (CSR) into the organization strategy, culture, mission and communications. By incorporating corporate citizenship into the company it is no longer an additional “nice thing to do” or something made to obey laws or regulations. Instead, corporate responsibility has become something business leaders and workforce want to engage in, frequently because executives who believe in the long-term see business profit. The four types of social responsibilities a...
In 1910, Mr. Jamshetji Tata opened Tata Hydroelectric Power supply Company. Tata Power Company (TPC) is created the first hydro-electric power plants in Khopoli in 191, and in 1919, the second was built in Bhivpuri India. TPC is the largest power company located in Mumbai Maharastra. This corporation generates, transfers and delivers electricity using fuel and renewable resources such as hydropower, geothermal energy, wind, and solar, ("Tata Power," 2013). TCP employee over 200,000 people across India and is the country’s largest employer (Srivastava, Negi, Mishra, & Pandey, 2012).
But how do you motivate companies to not be selfish in trying to get as much profit as they can? We all know that for a lot of companies, giving back to the environment more than likely, will take away from what they profit. But what if there are ways to make it possible to keep it inexpensive and what if we can regulate just how much a company needs to give?
I chose to look into General Electric for this project because they are an energy supplier and multi-national company. Energy providers have a reputation as a money hungry companies that care about the bottom line more than people and the planet. It is easy for a person to assume that a corporation of GE’s size, money would be its only concern. What I learned was that GE has a public image problem more than a Corporate Social Responsibility (CSR) problem. The company has been working to make the people of the planet more Earth friendly by creating technology that has higher efficiency with fewer emissions and lower resource demands. GE has a well-established strategy for Corporate Social Responsibility. As a result of CSR the company has reaped profit benefits as well as a perceptibly better company image. It was with great expectation that I chose GE in the hopes to find an area that a global energy supplier would need improvement. I found that GE is within the top-10 of companies that demonstrate CSR. GE shares this distinguishment with other companies such as Patagonia, Nike and General Motors. Besides continuing the course they have started, GE could further add to their repertoire by providing roadmaps for other companies to follow in order to be a business with demonstrable CSR.
Many laws have been put into place to make sure corporations act ethically, so they do not harm people or the environment. Corporations have a social responsibility to follow these laws and various other ethical actions; Johnson & Johnson, considered to be one of the most admirable companies according to Fortune, is one company that included their corporate social responsibilities in their code of ethics. Their code of ethics states that executive officers cannot financially benefit from unethical transactions or that their management must be competent and ethical (Code of Business Conduct, 2015). It is important for corporations to act ethically and hold up to their social responsibility, especially within the workplace; ethics are especially
experiencing growth rates in GDP per head at around 6% to 7% compared to the 2%
As a result of modern corporate scandals and rapid development of international business environments, social responsibility (SR) has become a key aspect of corporate competitive contexts. (Brammer, Williams and Zinkin, 2007). Businesses are under increasing pressure to incorporate SR amongst their profit-driven aims and have become increasingly accountable for their social and environmental actions. Increased interest in CSR developed in the mid 1990s as consumers began to lack their former trust in companies due to both environmental and financial scandals and it became noticeable that society was moving towards values incorporating harmony, quality of life and environmental conservation (Carrasco, 2007) Additionally, major corporate failures over the past two decades have resulted in increased demand for stronger, corporate governance (CG) rules. (Sui, Wright & Evans, 2007). Superior CG rules are needed in order to preserve the integrity of corporations, financial institutions and markets and the health and stability of world economies. (OECD Website)
Corporations that place an importance on corporate social responsibility usually have an easier experience when dealing with politicians and government regulators. In compare, businesses that present an irresponsible disregard for social responsibility tend to find themselves fending off various reviews and probes, often brought on at the assertion of public service organizations. The more positive the public insight is that a corporation takes social responsibility seriously; the less likely it is that innovative groups will launch public campaigns and claim government inquiries against it.