The research reveals that 72 per cent of UK investors do not consider CSR policies when making investment decisions, compared with 55 per cent of investors worldwide.
The international corporate community places CSR high on the agenda as evidence of good business practice, but the survey found that most investors in the UK, the US, Germany, France, Australia and South Africa still do not give it a high priority when deciding which companies to invest in.
According to Echo Research, the findings can be explained partly by the fact that there is as yet no clear method for establishing the financial benefits of CSR.
‘Financial firms would like to see a link between CSR and a balance sheet,’ said Echo Research chief executive Sandra Macleod. ‘Although exposure to social and environmental activism means the majority of corporate decision-makers now accept they must take CSR into account, the financial community is still trying to understand the economic effect of CSR on businesses.’
Nevertheless, the report suggests investors recognise the need to change the way they currently evaluate companies for investment. Macleod claimed CSR policies are already being taken seriously by investors when a company’s reputation has recently been damaged.
‘Investors want to find a way to penetrate PR puffery and self-exaggeration, and to assess the economic benefits of a company’s CSR policy against a set of financial criteria,’ she added.
The report concluded that stronger shareholder calls for ‘more CSR’ would also trigger a burgeoning interest in CSR throughout the business community.