study by New York-based GovernanceMetrics International (GMI), an independent corporate governance ratings agency, tracked the one-, three- and five-year returns of companies listed on the Standard & Poors 500-stock index, and found that firms demonstrating leadership in corporate social responsibility (CSR) outperformed the overall S&P index by several measurements: average stock price increase, return on assets, return on investment and return on capital.
GMI assigned each S&P-listed company a score from one to 10 based on the results of approximately 600 measures including labor practices, environmental activities, approach to workplace safety, litigation history, anti-investor practices and independence of board members. The 15 companies with the highest CSR scores showed an average stock price increase of 3.4 percent during the three years ending March 20, 2003, while the overall S&P 500 showed an average decline of 2.3 percent. The top five companies – Johnson Controls, Inc., MBIA, Inc., Pfizer, Inc., SLM Corp., and Sunoco, Inc. – averaged a 23.1 percent increase during the past three years. The 50 companies with the lowest scores showed an average decline of 11.1 percent for that period.