The Product Group intern projects explored the McKinsey article this week What is the business of business? By building social issues into strategy, big companies can recast the debate about their role in society. Ian Davis, The McKinsey Quarterly, 2005 Number 3., It made the SIF discussion list by Thursday afternoon. It is worth reading, originally published in The Economist May 26, 2005.
I think it is material to SRI professionals ongoing discussions re. materiality, the role of CSR, and language to describe issues in analyzing corporate value. Read together with the recent Morgan Stanley/Oxford Analytica paper July 2005, my takeaways impacting SRI research philsophy and process are:
1. Exploring drivers for corporate behaviour and actions in a way that understands the tension of competitive companies in a dynamic market, legal and social structure.
2. Tension within a sector/industry as firms compete against each other, while being held to deliver for the common good.
3. Connection to innovation in trying to capture future opportunities.
4. Developing a lexicon that translates to a mainstream investment analysis audience.
The phrasing of the challenge to the firm and the need to address the social issues as strategic business issues is refreshing in an article written by a thought leader at a strategic consulting firm, and in the same week that Jeff Immelt is on the front page of Forbes "making money cleaning up the world" 08.15.05 Current Issue. The response by companies should be interesting.
Using some of this framework, perhaps re-stated in a way that corporates can better appreciate, may be some part of the next steps to presenting SRI-type research on CSR issues to the mainstream audience, and money managers in particular.
At the very least, it is another step in making investor relations personnel more sensitive to our analysts and their research questions. Hopefully we can develop the right products to capture some opportunities.
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