Romer: Social responsibility and the business community

More than ever before, consumers are pushing companies to be environmentally aware. In 2019, the Governance & Accountability Institute found that 90% of companies in the S&P 500 Index had published a sustainability or corporate responsibility report that year.

Corporate social responsibility is a broad concept that dates back to the 1930s. It is a type of business self-regulation with the aim of social accountability and making a positive impact on society. Some ways that a company can embrace social responsibility include being environmentally friendly and eco-conscious; promoting equality, diversity and inclusion in the workplace; and giving back to the community. 

CSR evolved from the voluntary choices of individual companies to mandatory regulations at regional, national and international levels. However, many companies choose to go beyond the legal requirements and embed the idea of “doing good” into their business models. It is worth noting the keywords of self-regulation and voluntary — businesses recognize the importance to demonstrate corporate responsibility to play their role in building strong communities and don’t always need the government to regulate this.

Closely aligned with corporate responsibility is the environmental, social, and corporate governance — or ESG — approach. These standards include sustainability initiatives (the “E”), how well the company promotes social causes within and without (the “S”), and the diversity of a company’s staff as well as the quality of the code of conduct it enforces (the “G”). 

These are non-financial factors investors use to measure an investment or company’s sustainability. Environmental factors look at the conservation of the natural world, social factors examine how a company treats people both inside and outside the company, and governance factors consider how a company is run. I always have and always will support better corporate governance for companies (G) and think it is a positive thing to see investors are increasingly interested in aligning their investments with their values.

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According to a recent survey from Charles Schwab, 73% of surveyed participants claimed personal values have become a bigger factor in how they make life decisions in the last two years; 82% say their values impact their investing; 76% said when they make a purchase “the values of the company who made the product are an important consideration,” and an astonishing 59% of respondents say they’d take a lower salary to work at a company that shared their values. 

Investing within an ESG framework is now the fastest-growing segment of the asset management industry. Assets in ESG funds grew 53% in 2021, according to data provider Morningstar. The term has become an increasingly broad catch-all for a range of approaches to investment: everything from negative screening (removing sectors such as tobacco or defense) to positive screening (picking sectors such as clean energy), to a variety of strategies that promise to bring about positive social or environmental change.

Research papers by Moody’s Analytics and ESG data firm RepRisk and studies by Morgan Stanley and Vanguard show that investments based on ESG have either outperformed or performed as well as, non-ESG investments. Larry Fink, CEO of investment firm BlackRock and a leading proponent of ESG told clients “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients.” 

Fink’s perspective on ESG and CSR show the free market — without government interference — is working by responding to consumer preferences, and further shows that what is good for people is generally good for business. 

Chris Romer is president & CEO of Vail Valley Partnership, the regional chamber of commerce. Learn more at

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