"Approaches to CSR vary; they may relate to the core activities of the business and the context in which it operates – and hence be important for investors – but rarely is this the case."
Why is it important?
Mr David believes CSR – or a responsible business culture more broadly – is important in two ways.
He says: "Firstly, a company with strong CSR values will likely have a high degree of transparency and seek to communicate its CSR efforts to a wider stakeholder base.
"Investors like information, as it helps us to separate the wheat from the chaff, those who talk a good game, and those who deliver action.
"Secondly, an emphasis on CSR policy development suggests a senior management team which recognises the materiality of non-financial issues to a company’s valuation."
He lists non-financial factors, such as staff morale, environmental efficiency and social licence to operate, which can make the difference between a successful business and a failure.
"Companies doing more than just paying lip service to CSR reporting are therefore showing investors that they operate a high standard of risk management," Mr David adds.
According to Ms Crowl: "As more investors are becoming attune to sustainability issues, we can see the companies that are being left behind and are suffering financially as a result.
"Inevitably, companies that do not consider their social responsibilities become a poor investment."
She gives as an example the consumer staples sector, where companies that were once global brand leaders are now being shunned for not being more concerned about consumer product safety in their supply chains, and have seen valuations fall by as much as 30 per cent to 40 per cent year-to-date.
Ms Crowl adds: "Energy companies that aren’t investing enough in new renewable sources have also met with investors’ disdain. Similarly, with the rise of electric vehicles, we are seeing increasing scrutiny of battery companies to provide information about where key materials are being sourced from, given the poor record of child labour abuses in cobalt mining."
It is also becoming more important, the more people know about CSR, Anna Sofat adds.
Ms Sofat, founder and managing director of Addidi Wealth, says: "As the demand for transparency increases, a company’s supply chain and its standards are important factors in CSR.
"CSR is becoming more important for investors because they are more concerned about where and how their money is invested."
Getting it right
So which sort of companies are getting it right? What should investors interested in investing along CSR lines be looking out for?
Mr Kamhi states positive CSR activities can be found across various sectors and industries, whether consumer goods, financials or telecoms giants.
