Many of us in the sustainability profession look at the voluminous sustainability and CSR reports produced by public companies and wonder who reads them. In particular, we wonder if the analysts on Wall Street read them, and whether they take into account the information provided when making their buy/sell recommendations.
Most of us have noticed that analysts and investors are quick to push share prices into the toilet the minute a company stumbles into an environmental or social disaster (think Massey Energy April 2010 and BP about two weeks later). The fact is that the evidence was there in both cases that these companies had a history of irresponsible behavior, especially Massey Energy, and you could be forgiven for thinking that most diligent analysts might judge they were disasters in the making such that cautionary notes would have appeared in their reports before the roofs actually fell in. But no! Only in very rare instances do you find analysts referring to things like environmental fines, OSHA penalties, or lawsuits from communities in emerging market countries as evidence that a company might be poorly managed and therefore a bad risk.
Source: Environmental Leader
By Graham Russell