New Calvert Survey Shows Investors Link Corporate Responsibility with Reduced Risk, Better Returns

Calvert, the largest family of socially responsible mutual funds in the US, today announced the results of a Harris Interactive® investor survey, which dramatically highlights investors’ growing concerns about ethical standards at corporations and mutual fund companies. “The survey clearly shows that investors understand that corporate responsibility matters,” said Barbara J. Krumsiek, Calvert’s President & CEO. “It is increasingly clear that investors believe that well-governed, socially responsible companies are better positioned to deliver long-term, sustainable value to their shareholders,” she added.

Conducted by Harris Interactive® for Calvert, the survey found that investors see a definite link between good corporate governance and shareholder value:

84% of investors are more likely to invest in a mutual fund if it engages in ethical business practices in its operations and reporting.

71% of those surveyed said that they either strongly agreed (35%) or somewhat agreed (36%) that companies operating with higher levels of integrity carry lower investment risk.

68% of those surveyed said that they either strongly agreed (31%) or somewhat agreed (37%) that companies operating with higher levels of integrity deliver higher investment returns.

Against the backdrop of two years of corporate scandals, the Calvert survey clearly found that investors are more interested in knowing how the companies they invest in conduct their business. According to the survey, compared to two years ago, investors said they now:

want their financial advisors to investigate the ethical as well as financial performance of investments before making recommendations—92%.

are more interested in how corporations are governed—79%

are seeking more financial and accounting information about their investments—68%

are less confident about the trustworthiness of corporate management—77%

are less confident about the safety of financial markets—59%

are less confident about mutual fund integrity—45%

Finally, the survey showed that investors were generally in favor of a wide range of corporate reforms that might encourage ethical behavior. Here are the percentages of survey respondents who felt that the following reforms are either essential or very important:

Open and honest reporting – 90%

Having a Board of Directors that is independent from management – 71%

Setting reasonable executive compensation – 67%

Encouraging greater shareholder voting on key issues – 61%

Diversity in the Board of Directors – 56%

“At Calvert, we have long believed that healthy corporations are characterized by not only sound financial management but also sound corporate governance and overall corporate social responsibility, and that companies combining these attributes are best positioned for long-term success,” Ms. Krumsiek added. “It is clear that more and more investors agree, and will be seeking integrity-driven investments and socially responsible investment strategies in order to reduce perceived risks and improve long-term performance.”

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