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Wednesday, February 25, 2009

Should Business Responsibility to the Environment be Governed by the State of the Economy?

I just got the teaser from the McKinsey Quarterly on the global survey they did on “valuing corporate social responsibility.” The findings are disturbing. First the good news! The survey indicates 2/3 of Corporate Financial Officers and ¾ of investment professionals “…agree that environment, social and governance activities do create value for their shareholders…” Here is the qualifying kicker. They restrict that belief to “normal economic times.”

Well these are hardly normal economic times and the survey finds these professionals now “…view some of these programs differently.” Guess what has changed. The importance of governance programs has increased and the importance of environmental programs has decreased. The needs of the environment and our responsibility to protect the environment are not seasonal and cyclical.

It almost seems like CFOs who run corporate finances and investment professionals, those folks who advise others where to put their money, think board of director issues like CEO compensation is more important than their environmental efforts.

Are these folks ever out of touch with what most people are thinking about the role, responsibilities and purpose of business today. This is especially true given the amount of greed and corruption that are at the root causes of this recession.

I expect more investors to be seriously considering ethical investing criteria when they return to the market. Share your heads CFOs and Investment professionals. Business is not just about business. It is about public trust and a social license to operate and that demands employing the best possible environmental practices. Don’t forget the economy is there to serve the needs of society and not the other way around.