(Photo/Courtesy of the China Listed Company Index of Corporate Social Responsibility Report)

Corporate social responsibility should be taken as reference in the stock market to prevent short-sighted investment, according to a recent report on Chinese listed companies.

"To realize long-term and stable profits from the stock market, one should hold on to stock that is worthy of investment. The stock market in China, instead, seems to see long-term investment as abnormal and irrational," said the report, warning that the Chinese stock market – with its minimal rules - not only affects ordinary investors' interests, but has also bred a speculative mindset among investors in the Chinese stock market.

The report suggested that investors take as a reference for investment companies' corporate social responsibility, on top of the common practice of checking profits and financial reports. Companies with higher corporate social responsibility scores are more likely to take promising, sustainable development paths, and are therefore worthy of investment, the report noted.

“It takes a relatively long time to see the actual effect of social responsibility, but institutional investors tend to prefer faster gains, which is bad for corporate social responsibility. We want to call for rational instead of speculative investment,” said Zhang Xianli of Shanghai Jiaotong University (SJTU).

(Photo/Courtesy of the China Listed Company Index of Corporate Social Responsibility Report)

The report evaluated a total of 2,937 companies listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange. A total of 1,878 were private companies, accounting for 63.9 percent of the evaluated companies. Occupying the top spot was telecom equipment manufacturer ZTE, followed by Chinese gold producer Zijin Mining and leading new-energy vehicle manufacturer BYD.

The report was published by the Oriental Public Service Specification and Evaluation Center in Shanghai on Dec. 27. It was compiled based on the China Index of Corporate Social Responsibility, a system jointly developed by the Corporate Legal Research Center at SJTU and the Political Science Institute of East China University of Political Science and Law.

The index considers four indicators, and companies are evaluated on aspects ranging from creditors and labor rights to fair competition, environmental protection and philanthropy.