Socially responsible investing, shorthanded by most to “SRI,” is scorching hot. SRI assets have grown nearly 40 per cent annually since 2016, according to a U.S. report. In the United States alone, there’s more than US$12 trillion invested in socially responsible companies. And large institutions are also paying close attention to environmental, social and governance factors before squeezing the trigger on an investment in a company or asset.
In Canada, a recent survey shows that even though Canadians are increasingly interested in responsible investing, it’s still not a choice that’s always available to them. What’s more, there are still some lingering misperceptions that investing in funds that support social causes like affordable housing or human rights won’t yield high returns. That’s a myth that’s been pretty consistently debunked.
Millennial investors, nonetheless, in Canada and beyond, are turning out to be game-changers on the SRI front. Instead of oil-and-gas or tobacco stocks, they’re actively seeking out companies that promote diversity, tackle environmental challenges and make attempts to right social injustices. The millennial investor, just like the millennial consumer, is demanding corporate social responsibility.
So from a communications perspective, is your company well-positioned to capitalize on this growing trend? If you work for a socially driven and responsible enterprise, is it telling its story in the media, and ensuring the broader public knows about its efforts? Our recent Crisis and Consequences study indicated that very few Canadian business decision-makers believe their company is effectively engaging with the media to get news of its good works out into the public. (Subscribe to Provident View to read the full report -- and plan a course of action).
Walking before running
Before your company focuses its attention on getting the word out, first it must ensure it’s actually walking the walk in terms of doing good. It’s not enough to pay lip service to the idea of being a socially responsible company. Your leaders have to devote time and money to actually being environmentally and socially responsible. They need to tackle the gender pay gap internally and among their partners and their supply chains. They must ensure diverse workplaces. And above all else, they must endeavour to ensure their business operations do as little harm as possible to people and planet alike.
South of the border, nearly every company in the S&P 500 Index now issues a sustainability report. Yet in the U.S., too, businesses are failing to billboard corporate social responsibility practices that often include reducing greenhouse gas emissions, giving back to their local communities and promoting fair labour.
Ceres, the sustainable business trade organization, said in a recent report that “companies fail to communicate sustainability as an integral part of the decision-making that drives business value. They share sustainability information in ways that reinforce the misconception that environmental, social and governance issues are extra-financial and not material.”
It’s an important message, and one that encourages companies to embrace and celebrate their commitment to corporate social responsibility. Leaders would be wise to hear it, and ensure that media, investors and the public at large hear it as well.