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don't leave comparisons to third parties, firms told

December 2006

Companies should benchmark their social and environmental performance themselves and not rely on analysts and rating agencies to do the work for them, one of the leading figures in socially responsible investment told a meeting of investors and company representatives last month.

Speaking at the Triple Bottom Line Investing conference in Paris, Peter Kinder, president of Boston-based investment research firm KLD Research & Analytics, said: 'Quite apart from the need to collect management information such as year-on-year performance, which is clearly important, it is absolutely the province of companies to assess their performance using comparable data from outside the company.'

His comments came in a session on social reporting which focused on the quality of non-financial data provided by companies.

Geoffrey Mazullo, director of the East-West Management Institute's Partners for Financial Stability Program, had observed: 'It is not the company's job to produce comparable data outside the company. That's for analysts to do.' But Kinder disagreed: 'It is certainly the analyst's job to evaluate what the company says and to compare its performance with other companies, but I also strongly believe that it is the company's job to hold up a mirror to itself.

'That's not always easy, particularly when you are making comparisons in different cultures. But companies have been granted special privileges through limited liability and therefore have an obligation to evaluate themselves just as government does,' he told delegates.



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