As we head into the "financial chapters" in our class, I found an interesting article on the Chicago Tribune discussing whether annual reports should include the company's efforts in corporate responsibility.
Please read the Tribune article here:http://www.chicagotribune.com/business/yourmoney/sns-yourmoney-0323reports,0,5707856.story
In particular, I'm interested in what you think about this comment:
Companies are adding to their annual reports corporate social responsibility sections, which detail their community reinvestment and commitment to the environment, Greenberg said
Do you think that this corporate social responsibility is becoming more important to investors? If you believe that it is important to investors do you believe that this is something that will continue to be important? If so, why? If not, why not?
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6 comments:
Investors nowadays need to know how a company is giving back to them (the society). Apart from wanting to know how well the company is doing as it relates to profit there is much concern in the communities as to what assistance or how involved a company is to it. Due to the fact that so many companies nowadays are going bankrupt and people are losing their money, one other way of proving or convincing individuals that their dividends are safe is for companies to be corporate socially responsible. In doing so, they not only focus on their profit margin but on building long term relationships with their customers. When one invests their money or time in a company they expect to receive monetary gain or rewards that are beneficial or even both.
When companies sponsor to worthy causes such as sporting events, education in schools, health care and other special programs such as environmental issues, people will endorse and favour these ideas of contributing to a worthy cause.
Companies today are held to maintain higher standards than previously, because consumers are more aware of what is happening and not only consider a product’s quality or price but how reputable a company is (its character). If in the eyes of the customer (s) a company is not seen as a good corporate citizen, then they will walk away to its competitor who portrays same.
From the article:
"Jeffrey Immelt of General Electric:
'It will be challenging, as we expect U.S. consumer spending to slow and credit to tighten and be more expensive. However, GE is well-suited for this environment and any other.'"
Ironic, isn't it? Obviously, I'm doing many of these posts retroactively, so I may as well utilize hindsight, even if it's just to point out the hypocrisies spouted by some of these individuals.
That said, I will admit that I am a GE stockholder, and as soon as I have the available assets I intend to buy more now that it's plummeted. So I guess that makes me the kettle, but at least I'm open about it.
Which brings me to my next point -- GE pretty much lied to my face, and I'll still be going back because I think there's a potential for profit. I won't pretend to represent the majority of investors (and I wouldn't trust anyone who did), but I sure don't care about corporate social responsibility beyond the company not doing something outrageous, such as human rights violations or excessive cruelty to animals. Or dumping toxic waste in playgrounds.
Alright, apparently my criteria are just that the company can't qualify to be a villain on "Captain Planet."
Just wanted to link this article about GE, given the topic:
http://www.kiplinger.com/columns/picks/archive/2008/pick0411.htm
I meant to include it in my original post, but it slipped my mind.
http://www.kiplinger.com/columns/picks/archive/2008
/pick0411.htm
I don't know HTML. C'est la vie.
I think its good that companies are adding social responsibility sections which detail their community reinvestment and commitment to the environment because it shows the investor what good the company is giving the community and waht it is doing for the environment. It may not be the key determinant for investors, rather to invest in the company but hopefuy it does have a meaning and hopefully investors invest more inthe companies that are doing something for us. This will promote community reinvestment and commitment to the environment, and more companies will adapt positive attributes like these. Everyone could be better off. I think overall, we are all becoming more socially responsible. And like i said, social responsibility is not the most important thing to investors, however; i think it does have an influence and the more companies include social responsibility in their reports the more it will influence investors and continue to be important.
Yes I believe that investors are becoming more and more socially and environmentally conscious. They want to see that the companies they invest are doing something to give money back to society. I believe that this trend will definitely continue. The younger generation is especially concerned with the environment and the world at large and they will be the ones investing money into these companies. In return they are going to be looking for the companies with the money to put it back into society
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