Most FTSE companies report ethical performance
Eighty per cent of FTSE 100 companies report on a moderate to full scale on their corporate social responsibility performance, according to the Association of British Insurers director Mary Francis.The trade association for the UK's insurance industry claimed that companies now have a greater understanding of their impact on society and the environment.
"Companies cannot thrive if they are at odds with the society from which they generate their living," said Ms Francis to the Socially Responsible Investment seminar, organised by the Corporation of London and ISIS Asset Management this week.
She said that companies who are more ethically aware are also among the most competitive on the market. However, she warned against mandatory legislation to ensure corporate compliance.
"We won't get anywhere if we approach it with a bossy-boots mindset that is determined to tell companies to behave in ways that we personally have decided is good for them. We are not qualified to set absolute standards, for emissions for example," she said.
She added that voluntary compliance would extract a response of greater quality, rather than one that reflects a perfunctory action. She concluded: "A sensible approach to risk management can make a difference to returned by long-term investors. This is not a situation where one side wins and the other loses. With the right approach everyone can be a winner."
Her comments sit uneasily with a report issued last year by the OECD which questioned the effectiveness of voluntary approaches to corporate social responsibility (see related story).
New research, also released this week by an SRI research group found, from a survey of 130 trustees of UK pensions funds, a majority of trustees believe environmental and social performance will make a positive impact on the market value of companies within the next decade.
By Sorcha Clifford