Ask Ernst Ligteringen of the Global Reporting Initiative what's on investors' minds, and he'll likely say the answer is a lot more than simply dollars and cents.
Ligteringen is chief executive of GRI, a Netherlands-based not-for-profit organisation that offers companies help on how to improve their performance when it comes to social responsibility.
Nearly 50 hardware and telecommunications companies around the world use GRI's guidelines, which have been around since 1997. For the most part, the organisation has helped companies deal with environmental issues, such as the proper disposal of computer monitors. More recently, however, the group has widened its efforts to focus on problems such as the use of child labour in overseas subsidiaries.
The list of bellwether tech companies relying on GRI guidelines includes the likes of Canon, Hewlett-Packard, Advanced Micro Devices and Intel.
For Ligteringen, this is not just a do-gooder's mission. He says a growing number of shareholders are becoming socially responsible investors. In addition to seeking out profitable returns on their investments, he says, they increasingly want to see more accountable performances when it comes to issues like good corporate governance, the environment and labour relations.
CNET News.com recently interviewed Ligteringen, who is now developing a third version of the guidelines, which GRI expects to release in mid-2006.
Q: What do socially responsible investors care about, and who are they?
A: Investors include pension funds like the city of New York and CalPERS (California Public Employees' Retirement System). They want to select financial investments that are not only good for their members but are also good for the society and environment where their members live.
They also care about environmental and social issues, because those things can also affect the bottom line. A number of important shifts are going on today that are driving these changes. Sarbanes-Oxley, for example, raises the bar for corporate governance. As part of (the Act), a company is also obligated to disclose any environmental risks that exist. A year or two ago, if it wasn't part of the balance sheet, companies didn't think they had a responsibility to disclose it. Now it's considered part of their responsibilities.
How does this translate to the technology industry? Is it at the forefront of social responsibility efforts -- or dead last?
They have not been at the forefront, as the automotive industry has; or the oil, gas and mining industry; or the apparel industry, with its social impact because of the child labour issues.
But what we have seen now is that the high-tech industry is next in line. Regulations and other issues are causing tech companies to realise that they need to get in gear, and it's the leading companies who are positioning themselves.
