The Corporate Responsibility Exchange (CRE), the ailing London Stock
Exchange project that has been addressing ‘questionnaire fatigue’, has
been transferred to a new owner.
The project has been handed to ICSA Software, a division of the
Institute of Chartered Secretaries and Administrators, the global
professional body that represents 40,000 company secretaries and senior
administrators. ICSA Software already runs similar information-sharing
databases on corporate governance and says the venture is a ‘natural
fit’ with its existing activities.
No price was given for the transaction, which the ICSA said was a ‘transfer’.
The LSE established the CRE in 2004 as a central repository of
information on companies’ ethical performance. It was heralded then as
a solution to the questionnaire fatigue caused by demands for
non-financial company data made by analysts, investors, researchers,
index compilers and rating agencies.
The intention was to enable businesses to submit information only once
and to distribute the data to investors for an annual fee. However,
unexpectedly faint interest, coupled with staff cutbacks and the
distraction of takeover bids for the LSE, undermined the project (EP8, issue 3, p1).
Under the transfer, which took place shortly before Christmas, all
existing agreements between CRE and its clients were terminated,
although ICSA Software has immediately invited them to rejoin on
similar terms. However, this time institutional investors, which were
expected to pay an annual fee of about £20,000 ($39,000) under the old
regime, will now receive free access ‘to encourage companies to publish
their data’. This suggests the new model aims to make its money from
charging companies to file data.
ICSA Software is confident of attracting more participants by improving
the technology infrastructure so that users can upload and access data
faster and more reliably, and by promoting the project more
effectively. It claims that CRE had 170 clients in seven countries,
including 42 of the FTSE 100. Ethical Investment Research Services and
Business in the Community have been the main users of the information,
with few investors having shown interest under LSE ownership.
Craig Mackenzie, head of business ethics at Glasgow Caledonian
University and a member of the LSE working party that developed the
CRE, said the new owners had taken on a challenge.
‘One of the main things the CRE had going for it was the support of the
LSE, which has huge status for companies and investors in the UK and so
makes a very attractive focus for collective effort,’ he said. ‘Without
this, it just becomes one more service provider. ICSA has some limited
status in this field, but nothing like the heft of the LSE.
‘While the CRE may survive as a service for companies, I can’t see it
achieving the initial ambition of becoming a central clearing house for
CSR data.’
