Desarrollos estratégicos del Programa para 2017-2018 Desarrollos estratégicos fundamentales

equation modeling with the LISREL technique.

Overall, our data provided strong support for the hypothesized relationships. Specifically, we found that the level of integration of environmental management concerns in the strategic

planning process was positively related to financial and environmental performance. Furthermore, we found that the greater the functional coverage and the more resources provided to

environmental issues, the greater the integration of environmental issues in the planning process. These results suggest that concern for environmental issues may yield competitive advantages in the marketplace as the natural resource-based perspective suggests” Source: W.Q. Judge Jr. and T.J. Douglas, Journal of Management Studies 35:3 March 1998

Do Corporate Global Environmental Standards Create or Destroy Market Value

“Arguments can be made on both sides of the question of whether a stringent, global corporate environmental standard represents a competitive asset or liability for multinational enterprises investing in emerging and developing market. Analyzing the global environmental standards of a sample of US-based MNEs in relation to their stock market performance, we find that firms adopting single, stringent global environmental standard have much higher market values, as mentioned by Tobin’s q, than firms defaulting to less stringent, or poorly enforced host country standards….” Source: G. Dowell, S. Hart, B. Yeung, Management Science, Vol. 46 no. 8, 2000

Socially Responsible Investment

Socially responsible investment (SRI) refers to incorporating investment decisions with social and environmental concerns and personal values. SRI should not be confused with “socially directed

investment”, which is aimed at specific community development projects and do not require

“normal market return”. SRI funds have a significant presence in the capital markets and the available financial resources are constantly increasing. Social investors who invest in SRI funds include both individuals and institutions.

Four keySRI strategies have evolved over the years:

Screening describes the inclusion or exclusion of corporate securities in investment portfolios based on social or environmental criteria. Socially concerned investors generally seek to own profitable companies with respectable employee relations, strong records of community involvement, excellent environmental impact policies and practices, respect for human rights around the world, and safe and useful products. Conversely, they often avoid investments in those firms that fall short in these areas.

Source: Social Investment Forum

Shareholder Advocacy describes the efforts of investors to influence the behavior of a

company. This strategy gained prominence during the boycotts of companies doing business in South Africa, prior to the dismantling of apartheid. The four levels of shareowner activism are: voting your proxies on social and environmental issues at

annual meetings, initiating dialogue with company management, sponsoring shareowner resolutions, and, finally, divestment.

Source: Shareholder Action Network

Community Investment addresses the financial needs of low income and underserved

communities. Community investments can be made through institutions such as community development banks, community development loan funds, and community development credit unions. These investments include products such as loans, checking, savings, CD's, and money market accounts. They can be at market or below market rates.

Source: Social Funds

Social Venture Capital is a type of screening, but refers specifically to investing that integrates

community and environmental concerns into professionally managed venture capital portfolios. The essence of venture capital lies between providing capital and management assistance to companies creating innovative solutions to social and environmental problems, and institutional investors investing on potential one billion dollar technologies.

Source: Social Investment Forum

Although, primarily present in the US, UK, Canada, and Australia, SRI is growing rapidly in Europe where enabling legislation, such as UK’s requirement for pension funds to disclose the social and environmental performance of their bond portfolios, provides a fruitful ground for SRI funds.

With the globalization of the capital markets, the impact of SRI goes beyond developed countries and has an increasing influence on companies in the emerging and developing world as well. Companies are realizing that by incorporating CSR issues in their business strategy, they can facilitate access to additional capital available through SRI funds. However, at the same time, they expose themselves to more rigorous scrutiny by the SRI funds.

The evolution of SRI has already gone through four phases:

1. Using “negative” criteria for selection of companies – excluding companies involved in specific activities, including:

i. Making or selling

• Ornaments • Alcoholic drinks • Tobacco products ii. Poor environmental record

iii. Exploit labor in developing countries iv. Gambling or running casinos v. Abuse of human and animal rights;

2. Using “positive” criteria – focusing on specific sectors or themes; 3. electing companies through sustainability criteria, and

4. In addition to sustainability criteria investors are also assessing companies relationship with other stakeholders.

SRI funds can influence corporate policies through shareholders advocacy. Corporate law in many countries allows shareholders with a minimal stake in a company ($2,000 in the US) to place items on the agenda of shareholders meetings and require that a vote be taken on these matters at meetings. Then that can be used by SRI funds to address CSR misconducts by companies. As annual meetings of large corporations receive wide press coverage the possibility of putting the CSR issues at the meeting is a proactive mechanism which pressures management to take CSR concerns with full seriousness.

According to a report by the Interfaith Center on Corporate Responsibility in 1999, SRI managers filed about 220 resolutions with more than 150 US companies. The largest number covered environmental issues, with equity and corporate responsibility taking the next two places.

In addition to hoping to “do well by doing good” by investing in socially responsible companies, investors are recognizing the importance of SRI as a means for broader investment portfolio choices for their clients.

In many cases SRI funds have outperformed the average market return, and proved to be a less volatile investment. Some stock exchanges are also introducing CSR indexes.

Socially Responsible Investment - Readings