Companies large and small make a meaningful impact on the world, whether they want to or not. They employ hundreds, sometimes thousands and occasionally tens of thousands of people, while their services and products touch just as many, if not more. Most companies have a strategy for reaching their goals, and this is where corporate social responsibility (CSR) comes into play. CSR is a measure of how “responsible” a company is in their journey to reaching the goals they have set, and how that journey contributes to society.

Many companies can make their way to the top of an echelon, but if you look over the course of history, the companies that reach the top in unethical and irresponsible ways ultimately fall down the mountain. That’s why the thesis for investing is now shifting. Over the last several decades, the predominant perception was that companies always needed to do what was best for the shareholder in order to create the best financial outcome. But recently, the Business Roundtable has said they are migrating toward the stakeholder model. This means they are looking beyond the shareholder to the community, the customer and the employee because they now believe the best outcome for a company is created when all of these areas are taken into consideration.

For faith-based investors, evaluating a company’s CSR can help you tell if what matters to you also matters to the company, and if your faith-driven values will be reflected in your investments. You can look into a company’s CSR by comparing how they publicly portray themselves versus what they do in reality. In essence, how do they walk the talk? If the company says they stand for something, do they back that statement up with targeted initiatives, money and volunteer hours? Some companies just provide CSR lip service, while others are really serious about certain issues. This can be determined by looking at the CSR page on a company’s website, finding out if they produce an annual CSR report, and learning how the company is graded on CSR by third parties like Morningstar and International Shareholder Services (ISS). The key here is to determine if a company’s CSR elements are in line with what you believe. In the vast majority of cases, there will not be perfect alignment. Today’s mega-cap companies give away tens of millions if not hundreds of millions of dollars in donations, employee gift matches and charitable service hours.

But can investors make an impact on a company’s CSR and spur them to make change? The answer is a resounding “Yes.” That’s where being an engaged investor comes into play. At GuideStone Capital Management, we first reach out to the investor relations department about a particular item we’d like to see changed. Then the company’s CSR group will start and oversee the entire engagement process with the applicable business leaders for whichever area of the company might have an issue.

Of course, this process can take a lot of time and money. Simply doing a deep dive into a company’s CSR reports and scores might require time and resources that go beyond the means of individual investors. That’s why a faith-driven investor will frequently go to an asset manager who has experience in this endeavor and the institutional-caliber tools to conduct the research and determine the results.

There can be many nuances when it comes to CSR. For example, Facebook’s public reputation is not stellar right now because of their approach to political content. Some believe the social media platform is not censoring certain parties’ content enough, while others believe the censoring of some parties goes too far. But when it comes to issues of child exploitation and human trafficking, Facebook has been responsive to monitoring and removing content, pages and users involved in the scourges. At GuideStone, we have worked with Facebook on these issues and they have proven to be receptive and have taken a strong stance against child exploitation and human trafficking. So while an investor may find they disagree with a company on one issue, they may find that they align very well with a company on another issue. When it comes to CSR, an investor must decide what their definition of responsible is and determine what issues matter most to them.

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Will Lofland is director and head of intermediary distribution atGuideStone Funds, based in Dallas, and also oversees GuideStone's shareholder advocacy strategy.

Making CSR a Priority