Investors keep a closer eye on social and environmental indicators

New research suggests that company performance on social and environmental issues is holding greater sway on the decisions of investor analysts, although institutional investors still need some persuading. A report commissioned by the company-led group, Business in the Environment, shows that a third of analysts judge environmental factors to be ‘quite or very important’ when evaluating companies – a sizeable increase from 1994 when only a fifth claimed the same.

The figures for social issues have increased by an even greater margin, from an eighth to a third of analysts seeing them as important over the same period. However, the report, ‘Investing in the Future’, published on May 24, shows only a fifth of investors identified environmental and social factors when asked to consider specifically non-financial indicators. Derek Higgs, chairman of BIE, is upbeat about the findings, stating that, “this survey shows that an appreciation of corporate environmental and social responsibility has grown in the City, and that the integration of economic, social and environmental strategies is valued”.

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