Business and Society

Tricky, tricky, technology: is the sector good for SRI?

February 27, 2012 | 1 min read

Mr. Kurtz argues that (1) some underlying normative choices behind some of the indicators used in the technology sector are problematic, (2) indicator choices are inextricably linked to the investors’ objective function, and (3) some indicators indirectly measure other important effects.

He illustrates his argument with specific cases, and side-by-side comparisons of social indexes, sustainability ratings, and governance scores compiled by different research organizations. Comparing the different methodologies yields the interesting finding that the same companies often rank highly or poorly under different systems. This, he argues, suggests that ESG indicators may have broader application as indicators of the quality of a firm’s stakeholder management capabilities.

However, he continues, it is doubtful that any rating system can replace a judgmental approach, but the search for metrics has this aim and ambition. The risk is that reductive metrics replace ethics and, which he argues would be a serious mistake.

One of the more interesting aspects of this presentation is the concrete comparison between ‘tricky’ technology companies; while most high tech companies ‘screen well’ for ESG, because of their low involvement in ‘sin’ industries and the apparently moderate environmental footprint of software-based business. However, a closer look at the sector indicates that technology is not always as being an SRI investment area as might be assumed, particularly when sustainability and governance issues are taken into account.

‘Tricky indicator choices in the technology sector’


Presentation held at the International Bernheim Workshop ‘Choosing the right SRI indicators’ in Brussels on December 9, 2011.

This article may be reproduced according to our terms of use with attribution (and link, if online) to To be cited as: “Tricky, tricky, technology: is the sector good for SRI?”,, February 24, 2012.


Lloyd Kurtz
Lecturer of social investing, Haas School of Business

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