Conferences, position papers and websites are flourishing around the subject. Not a bad thing, you might think. Investors and company executives ought to work with a CSR compass, stitching ethical and socially responsible principles into the fabric of their businesses. Really ?

In the period between 1998 and 2000, CSR was a growing theme among financial investors in the US and Europe. Sell-side analysts came under pressure to produce research that covered socially responsible topics, providing screens on who was and who was not complying with a CSR ethos. Specific funds were established that invested solely in companies with clear CSR mandates.

However, as the horror of the tech meltdown crossed equity markets in 2000, the agenda changed. Instead of broadening the definition of what their jobs entailed, capital market participants reverted to their key raison d'etre . . . making money.

While it may seem crude and unseemly at a time of plenty, making money is in essence what thousands of fund managers, stockbrokers and publiclyquoted companies are employed to do. They exist because they supposedly provide financial returns in excess of inflation for investors that trust them with their cash. While some investors may fit into the rock-and-roll "capitalist bastard" stereotype, the vast bulk are professionals managing the savings of employees seeking a sum of money for retirement.

Their job is to build value by investing in companies where returns comfortably exceed cost of living increases. Through the alchemy of compounding, good fund managers can create a pool of wealth for these future pensioners.

The problems start when that objective is made opaque.

Consider this. A 20-year old investing 1,000 today, generating a 10% compound return over 40 years, will produce over 45,000 when he/she retires. A 12% compound return produces over 93,000 in the same period. That apparently "small" 2% variance can therefore lead to significant financial consequences for those investors trusting asset managers with their pensions. In that context any issue that dilutes the core focus of a fund manager or company executive must be treated carefully.

Back in 2000, equity markets entered a tailspin that led to fund managers delivering returns that fell in absolute terms. The FTSE declined by 24% between January 2000 and December 2001. In short order, tens of thousands of fund managers and stockbrokers were fired as their employers struggled to deal with declining returns. Those left were asked to do a simple job . . .generate investment ideas that create positive financial returns. The demand for CSR-related research disappeared.

It may be no coincidence that the return of CSRrelated themes coincides with a rampaging equity bull market. The FTSE has increased 33% since January 2004. Asset managers, investment bankers and stockbrokers are in champagne territory once more. Returns are comfortably exceeding inflation. Sound familiar?

As capital markets bask in the sea of plenty, thoughts migrate beyond the basics.

Every firm is in expansion mode, seeking areas of "growth". Among them, we again hear CSR agendas.

It seems appropriate fund managers and companies reflect carefully on CSR issues. Asset managers and corporates are at the heart of every market economy. They can therefore influence societal behaviour positively. But their investors and owners ultimately are you and I as future pensioners. Given that defined benefits in pensions are disappearing, and in general governments are diluting their commitment to pension funds, the importance of financial returns has never been greater. That point cannot be overlooked in the CSR debate.