The article in the url link below takes a step that I think is vital in order to evaluate more accurately a firm’s CSR Profile (Issues: Auditing CSR, p94):
“Oil prices are soaring. Returns on energy stocks have been fat. The 30 largest oil companies account for some 6% of the entire global equities market. In building wealth to pay for your kids' college or your own retirement, ignoring energy stocks can be costly. … But if you care about the environment, or how companies treat their employees in developing countries where oil extraction is often a nasty business, you confront an inconvenient question: Can you calm your conscience without hobbling your portfolio?”
Rather than use very blunt indicators of CSR activity (i.e., many SRI funds currently ignore firms that produce certain kinds of ‘sin’ products, such as cigarettes or oil—Issues: Investing, p184), this article outlines a process that begins to draw more subtle distinctions among firms:
“Fast Company turned to the sustainability experts at HIP Investor Inc. and the Social Venture Technology Group, both based in San Francisco, for help. These firms have together developed an exclusive methodology they call HIP™--Human Impact + Profit--for measuring the environmental and social impacts of business.”
Although this article only focuses on one specific industry, such a method of evaluation allows for comparisons across industries. For example, it allows for the possibility that a ‘good’ company in a ‘sin’ industry might have a better CSR profile (in terms of total social value) than a ‘bad’ company that operates in an industry that SRI Funds currently consider ‘acceptable’ (Issues: Brands, p153):
“Still, there are significant differences among the 10 largest players. Consider the volume of greenhouse gases released by their corporate actions. Marathon has taken real steps to cut emissions of carbon, methane, and other pollutants. Last year, the company released 49 tons of greenhouse gases per 1,000 barrels of oil produced. In contrast, ExxonMobil produced 104 tons of greenhouse gases per 1,000 barrels.”
Recognizing this distinction and beginning to account for it by avoiding stereotypes and other generalized statements moves the CSR auditing industry in a positive direction.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Oil
It's a dilemma for investors who want hefty returns and a clean green conscience: Can you own Big Oil and still feel good in the morning?
Fast Company Magazine
From: Issue 122 | February 2008 | Page 90 | By: Amy Feldman With R. Paul Herman and Sara Olsen | Photographs By: Plamen Petkov
http://www.fastcompany.com/investing/2008/index.html
http://www.fastcompany.com/magazine/122/oil.html
