External Evaluation-Based Measure of Social Performance
With the many limitations of the previously reviewed measures, scholars turn to find a different approach which will overcome drawbacks and provide a robust measure of social responsibility. Social ranking has become increasingly more important than just a matter for research purposes, but rather an important driver of the business world with multi-billion worth of investment funds seeking to reduce risk and improve yield through socially responsible investment (SRI) strategy. SRI assumes that the socially responsible firms are less prone to risks posed by their operating environment, and have increased potential for sustainable returns, thus representing preferable investment over other firms.