Pulse on Citizenship: Investing in Responsibility

Editor’s Note: This post is part of a monthly series from Microsoft’s Citizenship team that appears once per month. Pulse on Citizenship provides insight and commentary on topics and trends in corporate citizenship.

When you think of the groups who express the most interest and questions about a company’s social and environmental commitments who first comes to your mind:

Young people seeking to buy from or work for companies that meet their values?

Government officials?

The media?

All of these groups are important and interested audiences for our work. However, one of the groups we hear the most from about social and environmental issues on an ongoing basis might surprise you: investors. A growing number of investors believe the stereotype of a Wall Street banker concerned only with quarterly earnings and balance sheets. Some of these are socially responsible investors concerned about investing in companies acting consistently with their values. In addition, a growing number of large institutional investors see effective management of social and environmental concerns as an important aspect of effective management overall and an ingredient of long-term business success.

Investors managing more than $32 trillion in assets have signed on to the Principles for Responsible Investment, committing to consider environmental, social and governance issues in investment decision-making and ownership practices. According to the PRI, $32 trillion represents 15 percent of the world’s investable assets, and is an increase from the $4 trillion represented by the PRI when it launched in 2006. The investor-backed Carbon Disclosure Project has seen even more dramatic growth. In 2002, the first CDP survey asking companies to disclose their climate impacts and how they are managing those impacts came from a collection of investors with $4.5 trillion in assets. The latest CDP survey represented investors with $78 trillion in assets.

At Microsoft, we don’t wait to hear from our investors concerned about these issues to communicate with the investment community about our Citizenship practices. We release our annual financial report, proxy statement and Citizenship Report on the same day and cross-promote them to financial audiences and a broad set of audiences interested in Citizenship. Our Investor Relations website also has information regarding our Citizenship commitments and efforts. Beyond that, we proactively reach out to members of the socially responsible investment community with conference calls twice a year to brief them on recent Citizenship developments and to seek their perspective.

Many leading companies now have similar engagement strategies with socially responsible investors, but I think Microsoft is unique in how proactively we engage with our mainstream institutional investors on these issues. On a biannual basis, we engage with our largest institutional investors and public pension funds, which collectively held approximately 35 percent of our outstanding shares.

Individuals from our investor relations, corporate governance and citizenship teams cover traditional investment issues such as the content of our annual proxy filing and governance changes. But for the past several years, they also always include an agenda item on Citizenship issues.

I’ve been pleased and a bit surprised at how many of the investors are following those topics and have looked to our annual Corporate Citizenship Report and other resources to see what we’re doing. Many of them are candid in discussing how they are now working through whether and how to incorporate these topics into their investment policies and practices. But all of them express appreciation for the information we share and recognize it has relevance to them as investors interested in our business success.

I don’t think that would have been the case 10 years ago, and it will be interesting to see how the dialogue between investors and companies on corporate responsibility issues continues to evolve over the next 10 years.

About the Author

Director of Corporate Citizenship, Microsoft