Ministerial backing for Corporate Social Responsibility
Pensions Minister Stephen Timms has indicated his belief that ethical investments are not just good for people and the environment, but good for business.Speaking on Friday, June 17 Mr Timms said it was no longer the case that socially responsible investment equalled poor returns and argued that a company considering corporate social responsibility (CSR) when looking at where to put its pensions pot was likely to be a well-managed business.
"It is not unreasonable to take the view that companies with responsible environmental policies or that allow Trade Union representation, are likely to be well run companies," he said.
"They run less reputational risk than others, and so are less likely to suffer the commercial consequences of customer animosity.
"They are also less likely than others to suffer costly adverse regulatory or enforcement decisions.
"They are at least as likely and perhaps more likely to represent good investments, and those are considerations which trustees can certainly reasonably take account of."
Mr Timms support comes just weeks after the Environment Agency announced it would be shift its £1.1 billion pensions fund into new areas, with a strong emphasis on environmentally and socially responsible investment.
The EA told edie news its policy was based on sound economic, not ethical, foundations as investing in truly sustainable companies meant the money would still be there in years to come when current and future employees were cashing in their pensions (see related story).
With the minister now urging trustees to put CSR high on their agenda when looking to invest, his backing will be seen as a further victory for proponents of CSR.
By Sam Bond