A study by Curran and Moran (2007) conducted on companies ‘public profile’ and ‘profitability’ with respect to their inclusion, exclusion and deletion from the FTSE4good index has revealed that; a companies’ inclusion substantially increases both (positive impact), a companies’ exclusion does not impact, however a companies’ deletion will have a negative impact on both. Consequently companies have realised the marketing/profit opportunities CSR presents.
Reference:
M. Curran, D. M. (2007). Impact of the FTSE4Good Index on firm price: An event study. Journal of Environmental Management , 529–537.
Filed under: corporate sustainability | Tagged: CSR, FTSE4good index, profit
It seems to me that after initially setting the bar pretty low, eligibility for the FTSE4Good Index is more stringent. The point you are raising is therefore an important one because it’s not enough just to ‘greenwash’ your way in, you have to actually ‘walk the talk’ if you want to manage the risk of being kicked out.