Most comments on the January 21 US Supreme Court decision in Citizens United v. Federal Election Commission (1) have focused on the effects of direct contributions by corporations to candidates. Are such contributions invitations to corruption, or exercises of protected speech by persons associated in corporations?

But for those concerned about corporate governance or corporate accountability in any of its forms, Citizens United has a context and implications that go well beyond elections and freedom of speech. These challenge fundamentally the notion of corporate social responsibility (CSR) and socially responsible investing (SRI).

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Last weekend, Haitian microlender Fonkoze served its customers in a manner worthy of a James Bond movie. While Haiti’s commercial banks remained closed after the January 12 earthquake, Fonkoze reopened 34 of its 42 branches, disbursing both deposited funds and remittances from abroad. Last week, to ensure a steady supply of currency in Haiti, Fonkoze transferred $2 million in cash from its US account to a Florida Air Force Base.

On Saturday morning, after a C-17 cargo plane brought the money to Port-au-Prince, helicopters delivered it – hidden in office supply boxes – to ten drop points, from which Fonkoze employees restocked their branch locations.

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On January 14, investors responsible for $13 trillion in assets jointly called for a strong policy response to global climate change. Coming on the heels of the UN Framework Convention on Climate Change (UNFCC) summit in Copenhagen, the Investors’ Summit on Climate Risk showed broad private-sector support for public policy initiatives to combat climate change.

What will be the practical impact of carbon pricing for investors? A survey of RiskMetrics research shows that gaps in the existing regulatory patchwork could create perverse advantages for companies, investors and governments who avoid strong carbon regulations.

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Reports on the retail sector, including apparel sellers, are a staple of January’s post-holiday business news. However the last quarter looks to retailers, it has told a grim story about the retail supply chain. In November 2009, the BBC reported that Uzbekistan’s fall cotton harvest was gathered, in large part, by children. Boys and girls as young as 11 were forced out of school and into the fields by the Uzbek government, which depends on cotton sales for most of its revenue.

Child labor is sadly common in much of the world, but Uzbekistan – the third largest producer of cotton in the world – presents an especially egregious case of a national industrial policy founded on the conscription of children.

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This week, world leaders meet in Copenhagen to coordinate their efforts to address global climate change. As summed up by a RiskMetrics fact sheet on the event, the summit’s daunting goal is to set fair, achievable emissions reduction targets for both developed and developing nations.

The Financial Times’ Martin Wolf has succinctly stated why this will be so difficult:

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Investment & Pensions Europe’s Nina Röhrbein has presented some highlights from last week’s TBLI conference in Amsterdam. She quotes RiskMetrics Group’s Ran Fuchs, who asked why, historically, environmental, social and governance (ESG) research has primarily focused on equities, rather than fixed-income assets.

Mr. Fuchs’ question is about investment horizon, as ESG investment is long-term investment. In considering extra-financial metrics of corporate value, ESG investors act on their skepticism about short-term indicators, like share prices or quarterly returns. As ESG research can uncover longer-term risks and opportunities, Mr. Fuchs believes, its practitioners should apply its lessons to assets with longer time horizons.

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Last month, “The Economics and Politics of Corporate Social Performance” won the 2009 Moskowitz Prize. The Haas School of Business at UC-Berkeley and the Social Investment Forum (SIF) award the annual Prize to research relevant to socially responsible investing (SRI).

Prize-winning Stanford Professor David P. Baron and his team found that the “social pressure market,” through its interplay with the markets for products and equities, can reward companies for their corporate social responsibility (CSR) practices. In doing so, Baron confronts a canard that the SRI sector has disputed since its inception: “The Social Responsibility of Business is to Increase its Profits.”

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In preparation for the upcoming “SRI in the Rockies” convention, the Social Investment Forum (SIF) has posted highlights of its work over the past year. One of SIF’s most valuable 2009 efforts is a framework of its “Priorities for Financial Regulatory Reform.” Among these directives is a call to overhaul credit rating agencies. An October 19 report on the role of Moody’s in the subprime mortgage debacle explains why major changes are needed.

SIF’s Reform Agenda

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As corporations have come to recognize growing interest in their environmental impact, most firms have chosen to constructively engage with the public. The “greenest” companies have reduced their energy use and the impact of their products and operations, and many others have at least claimed to do so.

Such “greenwashing” is a concern of investors who consider environmental, social and governance (ESG) factors in their evaluations of corporate sustainability. But even as major firms have chosen, perhaps grudgingly, to work with their ESG stakeholders, at least one business lobby has taken a different tack.

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On September 16, Senator Max Baucus unveiled a newly revised federal health care reform bill. I’ll leave it to others to give the bill a thumbs-up or a Bronx cheer. I was intrigued, though, with one of its provisions: out-of-pocket spending on health insurance would be capped at 13% of household income for most Americans.

This is a recognition that the nation’s health crisis is not about cost – it’s about price.

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