- Seven companies were added to the RESPECT Index portfolio in the third edition of the CEE’s first socially responsible index
- Extension of the index portfolio to cover 22 participants proves the growing importance of CSR standards on the Polish market
- RESPECT Index as an incentive for socially responsible investment on the Polish market: Analyst survey results indicate a strong outlook for CSR in Poland in the coming years
The Warsaw Stock Exchange published the new composition of the socially responsible index RESPECT on 14 July. The index in its new composition will be published as of 1 August 2011.
The index portfolio now covers 22 participating stocks, including seven new companies:
Apator SA– new index participant
Barlinek SA
Bank Handlowy w Warszawie SA
Bank Millennium SA
BRE Bank SA
Budimex SA
DM IDMSA - new index participant
Elektrobudowa SA
Fabryka Farb i Lakierów Śnieżka SA - new index participant
Grupa Lotos SA
ING Bank Śląski SA
KGHM Polska Miedź SA
Kredyt Bank SA - new index participant
LW Bogdanka SA
Mondi Świecie SA
Netia SA - new index participant
PBG SA - new index participant
PGE Polska Grupa Energetyczna SA - new index participant
PGNiG SA
PKN Orlen SA
Telekomunikacja Polska SA
Zakłady Azotowe w Tarnowie-Mościcach SA
The addition to the index portfolio of seven companies which meet the highest standards of socially responsible management among all companies listed on the Warsaw Stock Exchange proves that Polish businesses are becoming more sensitive to Corporate Social Responsibility (CSR) and increasingly incorporate it as an integral part of corporate business strategy.
“We are very glad that Polish companies are so strongly interested in our ‘tool’, which measures and reviews socially responsible management and CSR. Less than two years since the launch of the RESPECT index, the project has indeed attained its objective in the Polish business community. Now it is time for investors to actively participate in the development of the best practice of corporate governance and CSR on the Polish market by investing in the stock of RESPECT Index companies,” said Warsaw Stock Exchange CEO Ludwik Sobolewski about the results of the third edition of the RI project.
In June 2011, the WSE and the RESPECT Index project partner Deloitte completed a survey of Polish analysts aiming to evaluate their CSR awareness and measure how much they include CSR in investment decision-making. The report is available on the RESPECT Index project website: www.odpowiedzialni.gpw.pl.
The results presented in the report suggest that the vast majority of respondents (62.5%) see a real impact of social responsibility engagement on the company’s financial performance. One half of all respondents believe that interest in socially responsible investment in Poland will be growing in the next two-three years, which may require a closer focus on ESG factors (Environment, Social, Governance) in doing business. As a consequence, this will impact the RESPECT Index as its importance to investors looking to evaluate the strength of companies will be increasing.
“We are very happy that the number of companies which fulfil the highest socially responsible management standards is growing and our index gives them an opportunity of better recognition among investors. The positive results presented in the report published today suggest that interest in socially responsible investment in Poland will increase sharply in the nearest future with a major contribution of the RESPECT Index project,” said WSE CEO Ludwik Sobolewski.
The RESPECT Index portfolio covers Polish companies listed on the WSE Main Market which follow the highest corporate governance, reporting and investor relations standards, and which also include and respect environmental, social and governance factors. The participating companies are screened by the WSE in a three-stage process of review of all these factors and additionally audited by the project partner Deloitte.
The share of each company in the index portfolio is determined according to the same procedure as for other stock exchange indices, taking into account free-floating shares, subject to a cap of the weight of the biggest stocks at 25% where the number of participating stocks is under 20 and otherwise at 10%.
The historical performance of the WSE indices suggests that socially responsible companies can be more attractive for investors. The return rate on the RESPECT Index was 53% from its first publication on 19 November 2009 until the last trading session in June 2011. The current value of the RESPECT Index is around 2,500 points while the return rate on the Index in 2011 alone (at the end of June) is 10%.