Social responsibility indices as a method of measuring corporate CSR activities

Abstract

The recent years have seen a noticeable increase in the importance of corporate social responsibility (CSR) concepts in the business environment. As a result, the demand for tools measuring corporate social responsibility has been growing. Investors, too started to realise the particular importance of reporting which became apparent after the recent financial crisis that had significantly diminished the trust in the global market. In response to investors’ expectations, financial institutions today publish indices of social responsibility. Currently, there are dozens of stock indexes based on CSR criteria, including the most popular Dow Jones Sustainability Index and the FTSE4GOOD Index, as well as RESPECT Index, the first CSR index in Central and Eastern Europe. Companies are increasingly frequently willing to implement CSR solutions and they also apply for inclusion in social responsibility indices. However, despite the high awareness of the existence of such indexes, they are not recognised by market participants as a key criterion to be used when making investment decisions.