REDWOOD SHORES, — According to a new study, 85% of executives and investors rank corporate responsibility as a central consideration in investment decisions. The study, conducted by by Oracle Corporation and the
Economist Intelligence Unit, surveyed 136 executives across numerous industries and 65 investors to examine the influence of corporate responsibility in the global business community.
One quarter of all Global Fortune 500 companies now produce some type of report that charts their environmental, social or sustainability efforts. The increased presence of corporate responsibility in daily business operations is being driven by a variety of factors, such as the erosion of trust in large corporations, the globalization of business, the corporate-governance movement, the rise in importance of socially responsible funds and sheer competitive pressures.
Most notably, the survey results showed that 85% of executives and investors said corporate responsibility was now a "central" or "important" consideration in investment decisions. This figure is almost double the level five years ago, demonstrating the increased importance placed on corporate responsibility by executives. Three critical aspects of corporate responsibility for executives surveyed were: ethical behavior of staff, good corporate governance, and transparency of corporate dealings. For institutional investors, transparency of corporate dealings was even more important. A total of 68% said it was one of the three most important aspects to corporate responsibility, followed by high standards of corporate governance (62%) and ethical behavior of staff (46%).
Additionally, 84% of executives and investors surveyed felt corporate responsibility practices could positively impact a company's bottom line. These findings emphasize the overall importance and shift in thought around accountability. The results of this survey also provide a realistic view of the challenges and obstacles in building, managing and measuring corporate responsibility programs and responsibilities within organizations.
"Executives take a pretty hard-headed view of corporate responsibility," said Nigel Holloway, director of executive services, Americas, at the Economist Intelligence Unit. "They feel strongly that ethical business conduct helps to sustain their company, but that charitable work and links to NGOs are less central objectives."
"Corporate responsibility and accountability have expanded beyond community involvement and into the boardroom," said Steven Miranda, vice president of application development at Oracle. "The results of this study clearly illustrate the financial ramifications for companies that adhere to strict corporate governance strategies to become more efficient, transparent and secure in business operations."
The study also examines what companies around the world are doing to adopt corporate responsibility initiatives. Highlighted in the study are definitions of corporate responsibility and what it means in relation to similar practices like corporate citizenship, corporate accountability and corporate social responsibility, among others.
The free report can be ordered
online.
