CSR/SRI Industry Stonewalls Study Questioning CSR Profitability

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Economist Arthur Laffer finds CSR may hurt bottom line.

– A self-styled clearing house for the “corporate social responsibility” (CSR) movement stonewalled a recent study showing companies don’t profit by adopting politically “progressive” policies.

CSRWire, an SRIWorld owned news distribution service, claims to offer a “live, unfiltered feed [of] news releases” representing “the views of the authoring companies and organizations.”

But CSRWire refused to publish news about a January study authored by award-winning economist Arthur Laffer that found no link between corporate profitability and CSR policies.

“Openly promoting a particular agenda is perfectly fine; however, CSRWire represents themselves as a provider of unfiltered information for investors and analysts, and that is clearly not the case,” said Steven Milloy, CSRWatch.com president. “Basic principles of transparency, which underlie the tenets of corporate social responsibility are sorely lacking here.”

CSRWire has distributed numerous press releases touting books and studies with claims such as “Profits with Principles” and “Study Links Financial Link to Environmental Performance.” More than 300 Web pages containing the word “profitability” linked to various CSR and SRI reports can be found on the SRI World Group sites.

“For years, advocates of CSR and ‘social responsible investment’ (SRI) have claimed that a CSR agenda is not only nice but profitable,” said Fred Smith, president of the Competitive Enterprise Institute, a Washington, D.C. free-market think tank. “But what they are really trying to do is keep themselves in business. They don’t want the public to get all the facts.”

Laffer’s study challenges the notion – loudly trumpeted by proponents of corporate social responsibility -- that the practice is not only good, but good for business. And the 1/22 issue of The Economist confirms this challenge, stating in an editorial “CSR cannot be a substitute for wise (business) policies … In several little-noticed respects, it is already a hindrance to them. If left unchallenged, it could well become more so. To improve capitalism, you first need to understand it. The thinking behind CSR does not meet that test.” See http://www.economist.com for the full story and http://www.economist.com/displaystory.cfm?story_id=3574392 for an interview with Economist Deputy Editor Clive Crook.

A copy of the Laffer study, funded by CSRWatch.com, transcript and streaming audio of the media roundtable is available online at http://www.csrwatch.com/.




Steven Milloy



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