The question of sustainable business practices’ actual contributions to bottom-line profits is oft-debated, but a new report released by the Economist Intelligence Unit and sponsored by Cisco, HP, Qualcomm, SAS, Abbott and UTC makes a compelling argument in favor of corporate citizenship’s moneymaking abilities. The report’s findings were summarized in the following points:
• To be successful, corporate citizenship must be driven from the top. But leaders of this initiative are needed at all levels of the firm.
• Significant companies find ways to channel the passion of their employees into corporate citizenship activities. Such activities help firms to recruit better-quality workers and retain them.
• To convince senior executives that corporate citizenship is effective, the financial benefit must be clear. Companies must set ambitious goals, along with ways of keeping track of progress toward them.
• Companies have discovered that financial advantages can accrue from forming partnerships with nontraditional stakeholders, including state and federal government, activist groups and NGOs.
As for the survey results, highlights include:
• When asked what their companies’ primary motivation for corporate citizenship was, the highest percentage of respondents—16%—cited revenue growth and increasing profits;
• 74% believe that effective corporate citizenship can help improve their companies’ bottom line;
• 54% said corporate citizenship initiatives are “somewhat important” to their overall business strategies;
• 71% believe business sustainability depends on effective corporate citizenship;
• When asked which groups their companies proactively engage on corporate citizenship initiatives, 40% said employees; 36% said educational institutions; 28% said government; 24% said shareholders; 23% said both public-private partnerships and consumers; 19% said advocacy groups; 18% said social entrepreneurs; 16% said NGOs; and 14% said media;
• 14% of respondents say employees are involved in setting corporate citizenship strategies to a great extent; 56% said to some extent; and 19% said not at all;
• In terms of the most profitable areas of corporate citizenship, the highest percentage—19%—cited education as “very likely;” and,
• The highest percentage of respondents (37%) said the CEO/president/managing director was responsible for setting corporate citizenship strategies, followed by the board (34%).
Source: Economist Intelligence Un