ZURICH Nov 13 Companies that seek to reduce
their environmental impact or make workplaces safer can boost
their share performance, a study published by Bank Sarasin & Cie
showed on Thursday.
Investing in firms with sustainable business practices, a
strategy known as socially responsible investing or SRI, can
yield higher returns than using strategies that focus only on a
company's financial performance, the report indicated.
"When companies control their value chain across the
production process, this can translate into better management of
the business overall, and ultimately better financial
performance as well," said Sarasin spokesman Harald Melzer.
Firms which devote resources towards improving the
sustainability of their business, for example by cutting their
emissions or improving safety at work, may see their share price
outperform that of their rivals, the study found.
"I believe that over the last three to four years
sustainability, and in particular climate change, has become
more of a focus for investors," said Eckhard Plinke, head of
sustainability research at private bank Sarasin.
The study was based on Bank Sarasin's sustainability ratings
of around 460 European and U.S. companies and it sought to
establish whether there was a link between a company's
sustainability and its share performance.
The findings undermine arguments that a focus on
sustainability can distract management and damage a company's
financial performance, ultimately depressing its share price.
The research report was produced by Sarasin with the Center
for Corporate Responsibility and Sustainability at the
University of Zurich and the Mannheim, Germany-based Centre for
European Economic Research.
(Editing by Elaine Hardcastle)