Customers increasingly shop green. One survey commissioned by British
retailer Marks & Spencer shows consumers are thinking more about ethical
and health issues when they buy clothing and food:
Almost one-third said they had decided not to buy an item of clothing
because they felt concerned about where it had come from or under
what conditions it had been made.Fifty-nine percent said they had also avoided buying a food product due
to similar concerns.
Seventy-eight percent said they would like to know more about the way
clothes are made including the conditions in the factories where
they come from and the use of chemicals in their manufacture.Seventy-two percent of food shoppers said they were concerned about
the future of fish stocks.Think of CSR as a form of compliance. In strict sense, the term compliance
refers to adhering to government regulations. But in broader sense, we can
think of practicing CSR as compliance with stakeholder expectations.
Sustainable businesses have better access to capital...................
Investors and venture capitalists are demanding more sustainability.
Companies that fail to recognize this trend risk losing out on a significant
source of investment in the years ahead. The European Social Investment
Forum (Eurosif) has a mission to “address sustainability through financial
markets.” The group estimates that the efforts will grow to Euro 1.25 billion
by the end of 2006.
The Socially Responsible Investors (SRI) community now wields considerable
clout. Nearly one out of every 10 dollars invested today falls under the cate-
gory of socially responsible investment. These institutional and mutual fund
investors are pushing for greater disclosure and challenging Generally
Accepted Accounting Principles. Shareholder resolutions on social and envi-
ronmental issues increased more than 16 percent from 299 proposals in 2003
to 348 in 2005. Institutional investors that filed or co-filed resolutions on
social or environmental issues controlled nearly $703 billion in assets in 2005,
a 57 percent rise over 2003.
Failing to live up to these standards can backfire. For example, the FTSE4Good
semi-annual review resulted in the deletion of 17 companies from the index.
A dozen were ejected for failing to meet environmental criteria, two for failing
to adhere to labor standards in the supply chain, two for failing to meet anti-
bribery standards, and one for owning a weapons company. Each company
was named in the report.