Social and environmental performance will significantly influence investment decisions within next three years

A new survey published today by CSR Europe, Deloitte and Euronext reveals that social and environmental performance is on course to become a significant aspect of mainstream investment decisions within the next three years. The survey , Investing in Responsible Business, shows that a majority (52%) of fund managers and analysts and 47% of investor relations officers (IROs) agree on that this trend will soon become a reality.

Six out of ten fund managers and analysts say they have noticed a grown interest in socially responsible investment over the past two years. An even greater number (69% of fund managers and analysts) expects the SRI market to grow over the next two years. The European SRI retail market is currently estimated to be worth €12.2 billion , while the European SRI institutional market represents €336 billion . Survey responses also confirm that nearly half of Europe’s financial institutions already offer SRI products.

It is becoming clear that the financial community sees a direct link between non-financial risks and shareholder value: eight out of ten fund managers and analysts believe that the management of social and environmental risks has a positive impact on a company’s market value in the long-term. The view is echoed by the companies themselves: IROs think that good social and environmental performance in the long term influences a company’s brand and reputation (69%), economic performance (46%), and market value (36%).

While six our of ten survey respondents noted an improvement in companies’ communication practices on social and environmental performance, 56% think it can still get better. Italy, Spain and the Netherlands are the least satisfied with the quality of information provided (65%), while the UK is an exception with more respondents satisfied (44%) than dissatisfied (38%).

“The European financial community has made significant strides forward in understanding CSR and recognising the importance of social and environmental performance in making investment decisions. CSR issues are becoming more relevant to their work of fund managers and financial analysts – many of them are realising that CSR is not an add-on, but imperative to a company’s daily management”, said CSR Europe’s chair Etienne Davignon.

“Socially Responsible Investment is gaining ground and is a complementary tool for fund managers and analysts for providing more transparency, new insights into global risks analysis – in that respect, we are going in the right direction,” said Jean-François Théodore, chairman of the Managing Board and CEO of Euronext.

“We are encouraged to see that the SRI market is continuing to grow and we believe that the factors behind SRI investment will inform mainstream investment decisions in the next three years. We also anticipate more voluntary integration of better social and environmental practices in business operations,” said Preben Soerensen, partner at Deloitte.