IBM study highlights the commercial benefits of CSR
A new study by IBM Institute for Business Value finds that corporations can gain a competitive advantage over rivals as well as develop new revenue streams by adopting corporate social responsibility practices.
“A growing body of evidence asserts that corporations can do well by doing good,” the authors of the report, George Pohle and Jeff Hittner wrote. “Well-known companies have already proven that they can differentiate their brands and reputations as well as their products and services if they take responsibility for the well-being of the societies and environments in which they operate. These companies are practicing Corporate Social Responsibility (CSR) in a manner that generates significant returns to their businesses.”
According to the findings of the report, many companies now see corporate social responsibility as a growth opportunity rather than just a regulatory compliance or philanthropic effort, with 68 percent of those surveyed focused on generating revenue through CSR activities. In addition, 54 percent believe CSR initiatives contribute to giving their corporations a competitive advantage.
Driving these beliefs is the rising influence of customers who, thanks to their ability to research and share information on the Internet, have become highly sensitized to a broad range of issues — everything from concerns about climate change, to product safety issues, to labour practices, to corporate financial accountability, to questions about whether corporations are returning enough of their profits to the community.
While customers are becoming the chief driver of this increased focus on CSR, 76 percent of businesses surveyed admit they don’t truly understand their customers’ CSR concerns. In fact, even businesses that feel they are knowledgeable and prepared to deal with CSR issues may not be. Nearly two-thirds of companies surveyed believe they have sufficient information about the sources behind their products and services to satisfy customer concerns, but half of those admit they don’t understand their customers CSR expectations well.
INCREASED MARKET SCRUTINY: Fueling the customer focus on CSR, three-quarters of businesses report that the number of advocacy groups collecting and reporting information on them has increased in the last three years as has the amount of information businesses are providing about the sourcing, composition and impact of their products, services and operations.
“The more information these stakeholders get, the more they want to know. This increased visibility of corporate behavior is driving consumers’ decisions on what to buy and who to buy from, who to work for, who to partner with, where to invest,” said George Pohle, VP and Global Leader of IBM’s Business Strategy Consulting Practice. “It’s not only critical for businesses to keep up with the emerging demands of their stakeholders, but to build CSR into the core of their business strategy. That way CSR is not viewed as a discretionary cost but an investment that will bring financial returns. And since customers are changing buying behavior as a result of CSR, the financial impact can be dramatic.”
The study, titled “Attaining Sustainable Growth through Corporate Social Responsibility,” surveyed 250 companies across the banding, chemicals and petroleum, consumer goods, electronics, energy and utilities, retail and automotive industries.
The study is available for download at: www.ibm.com/gbs/csrstudy
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Category: Climate change, Green corporations
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