Study: Socially responsible firms do not weaken portfolio

Zvi Amrousy: Corporate social responsibility is not just about the environment, but also about workers’ rights and corporate governance.

By NADAV SHEMER
Stock exchange figures 311 (photo credit: REUTERS/Kacper Pempel)
Stock exchange figures 311
(photo credit: REUTERS/Kacper Pempel)
Stocks of companies that declare their commitment to corporate social responsibility perform as well as those that don’t, a new study by researchers at Ben-Gurion University of the Negev has found.
The study examined 39 companies listed on the US Dow Jones Sustainability Indexes from 2004-2009 and 19 companies listed on the Israeli Maala CSR from July 2010. It found that there was no statistical difference between the performances of these companies and their counterparts.
Different definitions exist for corporate social responsibility, or CSR, but in general the term has come to include how a company treats its employees, its environmental impact and how it interacts with its local community.
Although the researchers did not find an increase in the purchase of shares of companies who have declared a CSR policy, they do believe the public will actively seek out and identify such companies in the long-term.
“There is added value here, because corporate social responsibility is not just about the environment, but also about workers’ rights and corporate governance,” the study’s author, Zvi Amrousy, told The Jerusalem Post on Monday.
Amrousy, who undertook the study as part of his master’s thesis under Department of Business Administration professors, said the ongoing public protests over the cost of living are proof that issues of corporate responsibility are growing in importance.
“People are taking note of all the stakeholders, the customers, suppliers, all of the components,” he said, “and companies that don’t declare corporate social responsibility will start falling behind. Even if you look at Israel, more importance is being placed on this, so that focusing solely on profits is not enough.”