February 13, 2019 – Financial and investment news magazine Barron’s extensively quotes Patrick Drum, senior investment analyst and portfolio manager of Saturna Sustainable Bond Fund, in the article “The Trouble With Corporate Responsibility Reports” published February 13, 2019.
The article, which was featured in Barron’s Sustainable Investing section, examines the “explosion” in the number of corporate social responsibility reports published by S&P 500 companies, but also questions their true utility for investors.
Drum’s take on the current state of CSR reports is that due to the lack of reporting standards, companies tend to emphasize favorable data while glossing over the negative.
“I’m delighted to see this broad-based attention to broad stakeholders, but what are we defining as success? You get more of the marketing and branding brochures,” he said.
He adds that many smaller companies lack the resources to produce a CSR report.
“I have been finding some of the greater ESG opportunities are those companies that don’t disclose their ESG information as much…As an ESG investor, my goal is to find companies with good governance and good management. The companies that actually are doing the good work are not the ones that are self-promoting,” said Drum.
For a deeper dive into the pitfalls of CSR reports, read Saturna’s December 2018 edition of “From The Yardarm” newsletter: “Beyond The Facade – Corporate Social Responsibility Reporting: A Potemkin Village?”
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