Sept. 17, 2007 European companies have well-developed responsible business practices across a broad range of issues, while North American companies lag behind, according to a new report (PDF) from global research firm EIRIS.

The report, which examined corporate environmental and social governance (ESG), as well as equal opportunity, human rights, and supply chain issues, suggests that European leadership in these areas results from a combination of responsible investment, NGO pressure, and a strong regulatory environment.

North American companies "significantly lag" behind their European
counterparts, the report notes that a core of larger companies are committed to responsible business practices. In general large companies are more likely to adopt sustainability programs and goals, according to the report.

Japan landed somewhere in the middle, with strong ESG performance just below European levels.

The report concludes that as more mainstream investors link ESG factors with financial performance, businesses will be forced to improve performance and reporting on these issues.