CSR to SRI

SRI had an important role in helping to cause the end of the apartheid government in South Africa. From the 1970s to the early 1990s, large institutions avoided investment in South Africa under apartheid. The subsequent negative flow of investment eventually forced a group of businesses, representing 75% of South African employers, to draft a charter calling for an end to apartheid. While the SRI efforts alone did not bring an end to apartheid, it did focus persuasive international pressure on the South African business community and the white minority government.

The mid and late 1990s saw the rise of SRI’s focus on other issues, including tobacco stocks, mutual fund proxy disclosure, and other diverse focuses. Since the late 1990s, SRI has become increasingly defined as a means to promote environmentally sustainable development. Many investors consider effects of global climate change a significant business and investment risk.

CSR corporate social responsibility has now moved to include SRI socially responsible investment in some cases. Mainly due to pressure from investors but also because the fund managers were missing out on money from investors who would not invest in funds that were not ethical. So the fund managers started new funds that were acceptable to the investors. Remember the fund managers job is to get investors money and invest to make more money for the investors and themselves. Now quite a few banks and insurance companies also have SRI funds as well as the unrestricted funds. The Coop bank which has always been ethical and now comes under the umbrella of CIS, cooperative insurance services, has several funds listed as SRI. Other banks such as Barclays and HSBC also have SRI funds to suite ethical investors.

A definition of CSR is 'Actions that appear to further some social good' so a company has to go beyond the norm for the benefit of some social good. This could be helping poverty in a third world country or child slavery or helping impoverished communities. Whereas SRI would be making sure that the investors money is only used in instances that does not involve weapons for example, but should only be used for a positive purpose to benefit society.

                                                        

Take the example of the Co-op who were the first supermarket to sell only Fairtrade Bananas, the growers formed a cooperative and became members of fairtrade that ensured that a premium from the sale of bananas was returned to the growers. This helped the growers to improve their community by building schools and improving there way of life. The Co-op followed later by being the first to sell only fairtrade chocolate. Now other supermarkets have followed and are doing the same. So the Co-op is not only being CSR but also SRI.

Sources: Co-op Annual Report, Wikipedia, EIRIS Report