Much SRI engagement is motivated by the general good practice of keeping shareholders informed.  However, an absence of specific deliverables often makes it hard for companies to target improved performance in this area.

The responsibility for this is shared:

  • Part of the responsibility for this lies with investors and agencies who do not communicate to companies the outcomes of their analysis;
  • Part of it lies with the lack of accurate SRI fund holding data;
  • Part of it lies with companies who are not disciplined in establishing clear objectives for their ‘SRI investor relations’.

Some companies target inclusion with the Dow Jones Sustainability Index as their metric of performance.

  • This practice has the advantage of focussing performance on one simple, single, communicable indicator;
  • It has the disadvantage of concentrating the measure of performance into the hands of one analyst firm (albeit a good one) which represents only a very small percentage of total assets under SRI management

To remedy the latter point, companies looking to develop objectives for SR-IR could base them on:

  • Inputs: e.g. person-days spent communicating with SRI investors
  • Outputs: e.g. number of questionnaires completed, no. of meetings held etc.
  • Outcomes: which could include:
    • Ratings achieved (with ratings agencies and fund managers);
    • Index inclusions (with multiple agencies)
    • Funds purchasing stock