PR NEWS asked CSR specialist Steve Voien, executive VP-director
of operations with Edelman's CSR practice, First&42nd., to
provide a bird's-eye view of CSR trends. As Voien makes clear,
studies are starting to convince C-level executives that a business
case can be made for CSR initiatives.
For UPS CEO Mike Eskew, the mantra when it comes to measuring
the value of business activities is: "In God we trust, everything
else we measure."
Presumably, this tough minded approach would rule out embracing
CSR, whose advocates often use the "soft" language of trust and
responsibility rather than the hard language of measurable
returns.
And yet in November 2003, Eskew keynoted the annual conference
of nonprofit Business for Social Responsibility (BSR), declaring
that smart corporations must seek a healthy balance between
economic success, social responsibility, and environmental
stewardship. He also unveiled his company's first CSR report,
entitled "Operating in Unison." Most companies won't tell you what
it costs to produce such a report, but industry insiders say the
costs run from $100,000 for smaller companies to a million for the
largest.
And that's just the cost of talking about what you're doing - it
doesn't include the cost of CSR initiatives themselves.
Something has convinced Mike Eskew - and the CEOs of dozens of
other large companies - that there is a solid ROI for CSR. While no
definitive "silver bullet" study has emerged, a growing body of
data is becoming hard to ignore. Here's a look at three of the more
recent studies that make the business case for CSR:
Financial performance:
A Merrill Lynch / Oekom study of the financial performance of
600 Morgan Stanley Capital International (MSCI) companies between
December 1999 and October 2003 found:
An index of "best in class" companies, based on a set of
rigorous environmental and social performance measures,
outperformed an index of "sustainability laggards" by 23%
Consumer, Investor, Employee Preference:
A 2002 Cone study of U.S. consumers found:
- 91% who learn about a firm's negative corporate citizenship
practices would consider switching to another company's products or
services - 83% would refuse to invest in that company
- 80% would refuse to work at that company
- 76% would boycott that company's products
Trust
Edelman's fifth annual Trust Barometer survey, released just
last week, polled 1,200 opinion leaders in the U.S. and around the
world, and found that NGOs are more credible spokespersons than
corporate CEOs by a factor of more than two to one. This suggests
that companies ignore the concerns of NGOs - including "super
brand" activist groups like Amnesty International and Greenpeace -
at their peril.