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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This week, Congress and the Obama Administration are discussing the future of American energy policy. The outcome of these efforts is unknown, but forward-thinking investors already expect big changes in the energy sector. The markets’ preparation for a less-polluting future includes the October announcement that First Solar, a solar-power technology firm, will soon join the benchmark Standard & Poor’s 500 index.

Investors expect a bright future for First Solar, a FTSE KLD Index constituent since 2007, partly because they assume that governments will eventually tax carbon emissions. If the carbon output of producers and consumers is taxed, then the relative cost-efficiency of solar and other renewable energy sources will increase.

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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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I’ve noted before the revealing names of hedge funds. The most obvious, of course, is Cerberus, named for the two-headed monster guarding the gates of hell in Roman mythology.

Now comes a report from the EuroMoney Institutional Investor Online Network on a Cerberus spinoff:

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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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The industrial workplace can be a dangerous place, and in some factories, the risks go beyond the pace of the assembly line. This week, China handed down 12 death sentences and nine life sentences to participants in July 2009 violence in the Xinjiang region. This lethal riot, which left approximately 200 people dead, was rooted in long-simmering tensions among Uighur and Han workers in a large toy factory.

Could management have done anything to prevent this tragedy? While the factory cannot be blamed for deep-seated ethnic conflict, CSR Asia’s Stephen Frost has argued that many employers do too little to defuse workplace disputes:

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On October 2, The Motley Fool surveyed the proposed Shareholder Bill of Rights Act. For the benefit of the site’s audience of retail investors, Alex Dumortier wrote “Let’s Reform Say-on-Pay,” a helpful primer on the Act’s requirement that firms submit their executive compensation practices to a non-binding proxy vote.

Say on pay (SOP) has gained public attention through a sustained effort by some institutional investors. Major companies – including, recently, Microsoft – have accepted SOP provisions championed by Walden Asset Management and Calvert, among other firms and investor groups. These shareholders’ efforts have helped convince the Obama Administration and key Congressional leaders to include say on pay in their reform proposals.

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On September 18, representatives of the Gender Equality Project (GEP) described their work at a KLD seminar. The GEP, an offshoot of the World Economic Forum (WEF) Gender Parity Group, studies and promotes the practices of corporate gender-relations leaders worldwide.

“We want to have a global impact, which is why our pilot project will highlight 10 bellwether global companies,” said Nicole Schwab of the GEP. “There have been efforts to promote an equal work environment for men and women at the national level, but unless we can engage businesses directly, discriminatory structures may remain in place.”

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This week, in a statement cited at Green Inc., Nike said that it “fundamentally disagrees” with the US Chamber of Commerce’s position on climate policy. The shoe giant joins three major utilities in opposing the Chamber’s recent lobbying efforts, which include a call for a “Scopes monkey trial of the 21st century” regarding man-made climate change.

Why are some corporations so eager “to boost their green credentials,” in the words of Ann Fifield of the Financial Times? Perhaps these firms would rather defy their peers than alienate their customers – or their Senators.

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On September 21, Newsweek introduced its landmark Green Rankings of the 500 largest publicly-traded US companies. This project, for which KLD was the lead research partner, was guided by an advisory panelof academic and non-profit policy leaders, including Wood Turner of ClimateCounts.org.

The Green Rankings are a recognition that public interest is the key to better corporate environmental practices.

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