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Companies increasingly need to satisfy the expectations of a wide range of stakeholders.
The City is among the most important stakeholder group for companies wanting to gain shareholder value from corporate social responsibility. Investment activity is booming. Last year, the London Stock Exchange saw trading volume of £1,896 billion in equities alone. This trading volume is based on investors evaluating and interpreting companies in order to determine whether to buy, sell or hold their shares.
In May this year, BiE launched its 'Investing in the Future' report which presented the results of a survey into the attitudes of a companies financial stakeholder groups, ranging from City Analysts and Financial Media Journalists to Institutional Investors, and Investor Relations managers employed by companies to communicate with 'the City'.
'Investing in the Future' confirms positive movement by sell-side analysts' focusing on environmental and social issues since 1994. Today when asked directly about the importance of environmental factors, 33% of analysts said it was 'quite or very important' in their evaluation of companies, compared to only 20% in 1994. The figures for social issues have increased by an even wider margin, from 12% to 34%.
The report pin-points the emerging gap between City users of company information and the companies who generate the information and data. Companies were cited as an important source of information for the City but the quality of the information they provided is poorly rated.
Importantly it highlights the scope for companies, which do give high priority to environmental and social responsibility to win greater recognition in the City. Most agreed that an emphasis on environmental and social performance indicates a company which is forward-looking and actively managing its reputation. In particular, integrating environmental, social and financial strategies is highly rated in assessing companies. Companies recognised as impressive performers on environmental and social issues are most commonly noted for their commitment, openness of information, keeping their word and clarity of reporting.
BiE wishes to acknowledge the support of the report sponsors.
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