COLORADO SPRINGS, CO -- 11/04/09 --
SRI in the Rockies, the largest and
longest-running sustainable and responsible investing conference in the
world, has announced the winner of the 2009 Moskowitz Prize for academic
research.
The winning study, "The
Economics and Politics of Corporate Social Performance," was
co-authored by David Baron of the Stanford Graduate School of Business,
Maretno Harjoto of Pepperdine University's Graziadio School of Business and
Management, and Hoje Jo of San Clara University's Leavey School of
Business. The prize-winning research provides strong empirical evidence of
the impact of social pressure on a company's financial and social
performance.
The Moskowitz Prize is awarded annually by the Center
for Responsible Business at UC Berkeley's Haas School of Business in
cooperation with the Social Investment Forum. The prize is the only global
award recognizing outstanding quantitative research in the field of
socially responsible investing.
"This year's winning paper takes a more nuanced view of a firm and its
interactions with society than most academic studies," says Lloyd Kurtz,
Moskowitz Prize administrator and senior portfolio manager at Nelson
Capital Management, an investment advisory affiliate of Wells Fargo.
"Rather than view a company as simply a profit-maximizing engine -- a
common assumption of academic research -- Baron and his colleagues
hypothesize that firms attempt to meet demands not only for financial
performance, but also for social performance in general, and for social
action specifically."
In their paper, Baron, Harjoto, and Graziadio analyze data on the finances
and social activities of 3,000 firms during the last four years of the
Clinton administration and first four years of the Bush administration.
Their findings include:
-- Corporate financial performance and corporate social performance are
largely unrelated, but that does not imply there is no causal relationship
between the two for individual firms.
-- Greater social pressure is associated with worse financial
performance, which could reflect the effects of pressure on firms'
reputations, brand equities, or productivity.
-- Greater social pressure also results in greater corporate social
performance.
-- Consumer-facing companies tend to benefit financially from good social
performance, while industrial companies do not.
-- Companies facing significant social pressure from activists and NGOs
tend to have sub-par financial performance.
"In short, the paper challenges academics and social investors alike to
appreciate the complexity of firms' relationships with society, and
demonstrates quantitative techniques that can help make sense of them,"
adds Kurtz, also a Haas School lecturer who teaches social investing in the
Center for Responsible Business. "Until now there had not been an explicit
attempt to model all of these relationships simultaneously within the
context of a unifying theory of the firm."
The winning paper was selected from among 30 entries by a panel of judges
from academia and the investment industry, and was announced at the 20th
annual SRI in the Rockies
Conference, the premier annual conference for the sustainable and
responsible investment industry in North America. SRI in the Rockies is
produced by First Affirmative Financial Network in collaboration with the
Social Investment Forum.
The winners received $5,000 in prize money and their paper will be
published in the Journal of Investing.
The Moskowitz award was launched in 1996 by the non-profit Social Investment Forum to
encourage and recognize outstanding research on socially responsible
investing. Named for Milton Moskowitz, one of the first investigators to
publish comparisons of the financial performance of screened and unscreened
portfolios, the Prize came under the umbrella of the Center for Responsible
Business in 2005.
About the Moskowitz Prize
Awarded by the Center for
Responsible Business at the Haas School of Business, in cooperation
with the Social Investment Forum during the annual SRI in the Rockies
Conference, the Moskowitz Prize promotes the concept, practice, and growth
of responsible investing. The sponsors of the Moskowitz Prize are: Calvert
Group, First Affirmative Financial Network, KLD Research & Analytics, Inc.,
Nelson Capital Management, Neuberger Berman, Rockefeller and Co., and
Trillium Asset Management.
About the SRI in the Rockies Conference
SRI in the Rockies is the
premier annual gathering of the sustainable and responsible investment
industry in North America. The 20th Anniversary SRI in the Rockies
Conference was held October 25-28, 2009 in Tucson, Arizona. SRI in the
Rockies is owned and produced by First Affirmative Financial
Network, an independent fee-only Registered Investment Advisor (SEC
File #801-56587), in collaboration with the non-profit Social Investment Forum.
