Companies displaying a social conscience with ethically-based investments are delivering a poorer return than businesses following a conventional and less risky approach, according to new research into 451 companies in the FTSE All-Share index.
The results showed that the average return for the least socially responsible companies was 24pc higher than for the most ethically minded businesses and 17pc higher than the average for the market.
The findings come as the Chancellor has decided to drop plans to require companies to include a section on corporate and social responsibility in their annual reports.
Critics say this cuts the pressure on business to give higher priority to social and ethical issues and discourages companies from fresh initiatives or raising their profile.
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