SRI indices and responsible corporate behaviour : a study of the FTSE4GOOD index

In recent years a large number of rankings, ratings and indices have been developed that attempt to measure the Corporate Social Responsibility (CSR) of companies. Substantive growth in the Socially Responsible Investment (SRI) market in the last decade plays a major role in this development. Little...

Full description

Bibliographic Details
Main Author: Slager, Catharina Henrike
Published: University of Nottingham 2012
Subjects:
Online Access:http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.575493
id ndltd-bl.uk-oai-ethos.bl.uk-575493
record_format oai_dc
spelling ndltd-bl.uk-oai-ethos.bl.uk-5754932015-03-20T03:18:13ZSRI indices and responsible corporate behaviour : a study of the FTSE4GOOD indexSlager, Catharina Henrike2012In recent years a large number of rankings, ratings and indices have been developed that attempt to measure the Corporate Social Responsibility (CSR) of companies. Substantive growth in the Socially Responsible Investment (SRI) market in the last decade plays a major role in this development. Little is known about the extent to, and ways in which, the metrics developed for the SRI market may contribute to improvements in CSR. The research aims to answer these questions by studying the FTSE4Good index, an SRI index launched by FTSE Group in 2001. The research examines how this metric for the SRI market is developed by FTSE with the help of third parties; and the influence of the index on the responsible corporate behaviour of included companies. A mixed-methods approach to data collection and analysis is used to study these two research questions, drawing on interviews, archival data and document analysis, media analysis and multivariate analysis. The research employs an institutional work perspective to study the practices of individual and collective actors aimed at creating, maintaining, and disrupting institutions (Lawrence, Suddaby & Leca, 2011). The research shows how the FTSE4Good index has become an integral part of international accountability standards that have emerged in the CSR field (Waddock, 2008a; Waddock, 2008b). Three types of activities underpin this trend: first, the work by FTSE and social rating agency EIRIS to frame the index inclusion criteria and measure compliance; second, the process of engagement and dialogue with companies and third parties (e.g. NGOs) by the FTSE Responsible Investment (RI) team; and third, the valorising by companies and third parties of the index as a de facto CSR standard. The research builds on a central concern in the social sciences regarding reactivity - the idea that people change their behaviour in reaction to being evaluated, observed or measured. External metrics that evaluate, measure or rank the performance of organisations often induce strong reactivity (Espeland & Sauder, 2007). The research findings show how, as the bar for inclusion in the FTSE4Good index is continuously raised, companies react by adjusting their behaviour in line with the index criteria. A dynamic conceptualisation of reactivity is developed, and the range of organisational responses to CSR metrics in the SRI market is explored. The engagement dialogue between the FTSE RI team and included companies is one of the main mechanisms to create reactivity, as it provides companies an opportunity to obtain advice and guidance about the index inclusion criteria. A conceptual framework is developed that links engagement, symbolism and routine practices of calculation and measurement to changes in corporate behavior. The research examines the institutional work needed for reactivity to occur. The study contributes to the literature on SRI by providing qualitative and quantitative analyses of the effect of engagement by the FTSE RI team on the responsible behaviour of companies. The research contributes to the study of reactivity and metrics by highlighting the work that is needed from the part of both the organisation undertaking the measurement and the organisations that are subject to the evaluation. The research contributes to the study of institutional work by incorporating sociomateriality (Orlikowski & Scott, 2008) into the analysis of embedded agency. The study has implications for those seeking to govern by metrics, as it shows how striking a balance between what can be measured and what ought to be measured is complicated and requires a lot of work. Lastly, the research opens up a number of venues for future research into CSR, SRI and institutional work.658.408HG FinanceUniversity of Nottinghamhttp://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.575493http://eprints.nottingham.ac.uk/13709/Electronic Thesis or Dissertation
collection NDLTD
sources NDLTD
topic 658.408
HG Finance
spellingShingle 658.408
HG Finance
Slager, Catharina Henrike
SRI indices and responsible corporate behaviour : a study of the FTSE4GOOD index
description In recent years a large number of rankings, ratings and indices have been developed that attempt to measure the Corporate Social Responsibility (CSR) of companies. Substantive growth in the Socially Responsible Investment (SRI) market in the last decade plays a major role in this development. Little is known about the extent to, and ways in which, the metrics developed for the SRI market may contribute to improvements in CSR. The research aims to answer these questions by studying the FTSE4Good index, an SRI index launched by FTSE Group in 2001. The research examines how this metric for the SRI market is developed by FTSE with the help of third parties; and the influence of the index on the responsible corporate behaviour of included companies. A mixed-methods approach to data collection and analysis is used to study these two research questions, drawing on interviews, archival data and document analysis, media analysis and multivariate analysis. The research employs an institutional work perspective to study the practices of individual and collective actors aimed at creating, maintaining, and disrupting institutions (Lawrence, Suddaby & Leca, 2011). The research shows how the FTSE4Good index has become an integral part of international accountability standards that have emerged in the CSR field (Waddock, 2008a; Waddock, 2008b). Three types of activities underpin this trend: first, the work by FTSE and social rating agency EIRIS to frame the index inclusion criteria and measure compliance; second, the process of engagement and dialogue with companies and third parties (e.g. NGOs) by the FTSE Responsible Investment (RI) team; and third, the valorising by companies and third parties of the index as a de facto CSR standard. The research builds on a central concern in the social sciences regarding reactivity - the idea that people change their behaviour in reaction to being evaluated, observed or measured. External metrics that evaluate, measure or rank the performance of organisations often induce strong reactivity (Espeland & Sauder, 2007). The research findings show how, as the bar for inclusion in the FTSE4Good index is continuously raised, companies react by adjusting their behaviour in line with the index criteria. A dynamic conceptualisation of reactivity is developed, and the range of organisational responses to CSR metrics in the SRI market is explored. The engagement dialogue between the FTSE RI team and included companies is one of the main mechanisms to create reactivity, as it provides companies an opportunity to obtain advice and guidance about the index inclusion criteria. A conceptual framework is developed that links engagement, symbolism and routine practices of calculation and measurement to changes in corporate behavior. The research examines the institutional work needed for reactivity to occur. The study contributes to the literature on SRI by providing qualitative and quantitative analyses of the effect of engagement by the FTSE RI team on the responsible behaviour of companies. The research contributes to the study of reactivity and metrics by highlighting the work that is needed from the part of both the organisation undertaking the measurement and the organisations that are subject to the evaluation. The research contributes to the study of institutional work by incorporating sociomateriality (Orlikowski & Scott, 2008) into the analysis of embedded agency. The study has implications for those seeking to govern by metrics, as it shows how striking a balance between what can be measured and what ought to be measured is complicated and requires a lot of work. Lastly, the research opens up a number of venues for future research into CSR, SRI and institutional work.
author Slager, Catharina Henrike
author_facet Slager, Catharina Henrike
author_sort Slager, Catharina Henrike
title SRI indices and responsible corporate behaviour : a study of the FTSE4GOOD index
title_short SRI indices and responsible corporate behaviour : a study of the FTSE4GOOD index
title_full SRI indices and responsible corporate behaviour : a study of the FTSE4GOOD index
title_fullStr SRI indices and responsible corporate behaviour : a study of the FTSE4GOOD index
title_full_unstemmed SRI indices and responsible corporate behaviour : a study of the FTSE4GOOD index
title_sort sri indices and responsible corporate behaviour : a study of the ftse4good index
publisher University of Nottingham
publishDate 2012
url http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.575493
work_keys_str_mv AT slagercatharinahenrike sriindicesandresponsiblecorporatebehaviourastudyoftheftse4goodindex
_version_ 1716779819274862592