What’s a Sustainable Company? It’s Hard to Define
How do you know if a company or mutual fund is socially responsible or not?
It depends on whom you ask, which can be frustrating for an investor but isn’t likely to change soon.
There are now several firms that attempt to rate the social responsibility, or “sustainability,” of companies and funds. They aim to serve the many investors who take into consideration companies’ environmental, social and corporate-governance, or ESG, standards. These firms are becoming a force in markets, according to John Willis andCarolyn Roose of Sustainable Insight Capital Management, who say some 33% of companies report that inquiries from sustainability analysts have shaped their business strategy.
But definitions of sustainability vary widely.