Investors

Optimists celebrate the fact that 'ethical' funds screened against environmental or social criteria are currently growing by about a third a year in the UK. Pessimists point out that all together they still only account for around £3 billion, against pensions funds of £800 billion and much more in other institutional funds. Both optimists and pessimists despair of the mainstream investment analysts - the hard-nosed moneymen and not just a few women today too - ever taking the subject seriously.

But realists understand that the 'pull effect' of demand for ethical investment will never be strong enough to change corporate behaviour, nor influence most analysts' attitudes. What is needed is the 'push effect' of evidence that corporate social responsibility is good for business. Realists know, as that ribald saying might go, when you grab them by the numbers, their hearts and minds will follow.

Indeed evidence is slowly accumulating that well managed companies, which set high environmental and social standards, are being rewarded with above- average stock market performance. We say good management advisedly, because most of the studies are still bedevilled by the lack of proof of causality. Which comes first: higher social responsibility leading to profit, or commercial success allowing companies to be responsible? In fact, the more likely scenario is this: already successful companies can do even better by setting high standards for all stakeholders without exception - customers, communities, environment and wider society.

In any event, the question for Briefing readers is surely 'what am I doing to help generate that hard evidence which will persuade the City analysts?' Apply a simple test by reading some of the new breed of social reports and ask yourself: would the contents persuade them that this concern for 'doing good' is about securing a sustainable business - or make them think management had lost the plot and was being diverted from its core mission? In short, where are the numbers?

Corporate Citizenship Briefing, issue no: 54 - October, 2000