The report details findings of extensive research into the degree to which companies are addressing key issues including corporate governance, environment, equal opportunities, human rights and supply chain, and finds that responsible practices are increasingly being adopted by companies worldwide, though there are significant differences between regions:
North American companies significantly lag behind their European counterparts across all the areas researched although a core of larger companies have adopted responsible business practices
European companies have well developed responsible business practices across a broad range of issues. This is due to a sophisticated responsible investment market, NGO pressure and a strong regulatory environment
Japanese companies demonstrate strong performance on environmental issues, although need to make progress on other areas to match European levels
large companies are more likely to adopt responsible business practices than smaller companies
continued growth in responsible investment especially amongst ‘mainstream’ investors – driven by a belief that environmental, social and governance issues affect financial performance – is expected to drive greater corporate take up of and reporting on these issues.
“Twenty five years ago very few companies were aware of ESG issues, let alone developing policies and systems to address them” said Bob Gordon, report author and Head of US and Japan Research at EIRIS. “Corporate responsibility continues to evolve from what was a mainly philanthropic activity to a more mainstream approach where it is integrated into core business activities”.
Peter Webster, EIRIS’ Executive Director said: “Investors are concerned by the potential costs of investing in irresponsible and unsustainable companies. Increasingly they are favouring those companies that are responding well to the environmental, social and governance challenges they face – each of which has the potential to affect shareholder value if not properly addressed”.