Companies which consistently manage & measure their corporate responsibility outperformed their FTSE 350 peers on total shareholder return in seven out of the last eight years. They also recovered more quickly in 2009 compared with their FTSE350 and FTSE All-Share peers.
In October 2008, Business in the Community published research showing that FTSE 350 companies which consistently managed and measured their corporate responsibility outperformed their FTSE 350 peers on total shareholder return 2002-2007 by between 3.3% and 7.7% per year.
Since then, the downturn has had a dramatic effect on the financial returns of companies. In 2008, the FTSE All-Share saw an average decrease in Total Shareholder Return (TSR) of -30%, with a +30.1% recovery observed in 2009.
- With such financial instability over the last two years - does corporate responsibility still make any difference to financial performance?
- Do companies that outperformed their peers in better times fare differently now
In order to test this, Business in the Community, with support from Legal & General, once again turned to Ipsos MORI to conduct statistical analysis using the financial data of companies which participated in Business in the Community’s CR Index each year between 2002 and 2009 and are listed on the London Stock Exchange. The objective of the analysis was to assess any link between managing and measuring corporate responsibility and their financial performance by total shareholder return comparing it to the FTSE 350 and FTSE All-Share, as we did in 2008.