Companies that Treat Employees Well Attract 35% More Investment From SRI Funds

Companies that Treat Employees Well Attract 35% More Investment From SRI Funds

Treating employees well would seem to be conventional wisdom, business management 101. Many studies show that employees who earn fair wages, enjoy good working conditions, and who work for a company that implements CSR values are more productive, adding real value to a company’s bottom line. Now, a study has found that practicing good employee relations can also be profitable in terms of investment.

New research concludes that it’s worth thirty-five percent more investment from socially responsible funds. The study, conducted by Onur Tosun, Assistant Professor of Finance at Warwick Business School in Coventry, England, studied one thousand five hundred eighty-five U.S. corporations, and forty-seven socially responsible investment funds, using measurement criteria from the KLD Index and the US Forum for Sustainable and Responsible Investment. He found that those companies who treated their employees the best attracted the most money from SRI funds.

Dr. Tosun argues that this increased level of investment makes sense, as firms investing in their employees signal high corporate social responsibility, which in turn enhances a firm’s values—and bottom line valuation.

I’m John Howell for 3BL Media.