.. for-profit companies that take a long time horizon in their decision-making are likely to make more social and environmental investments. Things like training workers, bolstering communities, and protecting ecosystems can take a long time to pay off for private companies. When they do, the return -- including a stronger labor pool, a wealthier consumer base, fewer working days lost to strikes and protests, and greater employee loyalty -- can be comparable to other for-profit investments.
In fact, strictly for-profit companies can be among the best social investors because they apply the same discipline to these investments that they would to other parts of their core business. Energy and mining companies, for example, have some of the longest time horizons in the private sector, and they tend to be big social investors as well. Some European companies have actually stopped issuing quarterly reports to shift the attention of analysts to the long term. And because they are still targeting a single bottom line, profit, there's no loss of clarity about their mission or erosion of transparency for shareholders.
Clarity and transparency are important parts of the for-profit model's inherent value. Chief executives know what shareholders expect of them, and there is a straightforward, verifiable, and comparable way to measure their performance: profit and loss. This is not the case for companies with triple bottom lines. Even if companies measure the effects of their operations on people and the planet, every company may choose a different set of metrics, and the weight given to each metric in their decisions may be far from obvious. Shareholders in for-profit companies already have to worry about executives piling up perks and building empires; a triple bottom line may muddy the waters even more.
quinta-feira, junho 27, 2013
The Case Against Socially Responsible Business
The Case Against Socially Responsible Business: