As we head into the "financial chapters" in our class, I found an interesting article on the Chicago Tribune discussing whether annual reports should include the company's efforts in corporate responsibility. Please read the Tribune article here:http://www.chicagotribune.com/business/yourmoney/sns-yourmoney-0323reports,0,5707856.story
In particular, I'm interested in what you think about this comment:
Companies are adding to their annual reports corporate social responsibility sections, which detail their community reinvestment and commitment to the environment, Greenberg said.
Do you think that this corporate social responsibility is becoming more important to investors? If you believe that it is important to investors do you believe that this is something that will continue to be important? If so, why? If not, why not?
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9 comments:
I think this may just be a trend that could fade away in the near future. I think a shareholder's stock value is all they care about in the end. If the corperate responsibility reports are increasing a companies market value then sure it matters, but I dont think it has that great of an impact. And if the world's greatest investor of all time, Warren Buffet is warning shareholders of future declines then I trust anything he says. And I like the rule that a proxy be sent to all investors.
I think the only reason why they include it, and the only reason why 90% of the companies doing green things are doing them, is simply for better marketing (public image.) It just another "feature" of a companies product - recycled material, green material, no emmissions....
nobody thinks carmakers are making fuel efficient cars because they care about global warming and stuff, its simply because a) there is a market for it, and b) it enhanced public image and gives them another thing to brag about.
i think the trend will only increase, and soon every company will be bragging about their green activities, even on their financial statements.
I believe that corporate social responsibility is just a way for companies to advertise themselves, make themselves one with the customer, and the most important thing is shine the light away from the financial section. A lot of companies even though are declaring losses try to distract its shareholders and the media by showing how environmentally friendly they became. Yes there are a few companies that commit in going green but the majority of them just want to try to hop on the bandwagon and go along for the ride. They think that if they plant a few trees or try to use some form of recycled paper, it makes them "green" while in turn they can do a lot more for the environment than you and me. CSR is not more important to investors, it's just a way for the guy at the top to look good and that his company all of a sudden is doing something good.
Corporate Social Responsibility is going to become more important to companies because of the new laws and initiatives being taken to get companies to reduce their pollution by doing something for the environment. Investors will see this from a monetary standpoint as just another expense the company has to deal with. Less profit equals less return for the investor. Even though it may not be seen as important to all investors, it is something they are going to have to take into account as more and more environmental laws get passed.
I think, it is very important for the companies to become social responsible and participate better toward employees, customers, and environment. However, I don’t think the section about corporate social responsibility in annual reports should be added at least for now because many companies would abuse this opportunity especially if they had a chance to cover up their taxes. What’s more, I don’t believe that CSR has become more important to investors – they invest money in companies that are trying to “go green” just because it will make them look good in society.
I think it’s great that companies are trying to be more responsible, but I feel that information isn’t necessary in the company’s annual reports. They should just focus on the performance of the company in the annual report instead of trying to fill it up with useless information to try and make the company look better than it actually is. Of course a company is going to brag about all the things they are doing to help the environment, but they never mention all the harm they are doing.
I think if C R is added to reports is just to inform its stockholders of how the company is trying to stay in a good public image. Nobody wants to own stock in a company critized by harming the enviorment or owning sweatshops. But in the end stock holders just care of making a good deal in their investments. This will probably continue specialy with the global warming issue. I believe we shouldnt.
The main reason any company would want to add a CR section would be to make their report look better because they are lacking somewhere else. the only thing that a CR section is good for is their image to the public. if they were a good company to invest in then their financial reports should show that. by saying that they are contributing to the community they are generating a good image for themselves even though it could be a manufacturing plant that pollutes the enviroment more than it gives back. but you wont find that in the CR report.
I disagree that it could be a fad that may go away. the more we realize we need to support companys liek this they more theyll be supported. Of course its a good idea to to put CR in your report because itll get attention and to mayne peole who look for tht source in a company may support that company more. its a good image for the company and i think we will comtinue to see more companies with CR in their reports.
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