CEOs to increase CSR investment by 25% – new study

CEOs from around the world and across diverse industries plan to increase corporate social responsibility (CSR) investments significantly over the next three years, according to a new global survey by IBM.

The study, titled “The Enterprise of the Future” was conducted by IBM Global Busines Services in conjunction with the Economist Intelligence Unit and involved face-to-face interviews with 1,130 CEOs from 40 countries across 32 industries.

According to the survey, CEOs plan to increase investment in corporate social responsibility initiatives by 25% over the next three years to better understand the demands of increasingly “socially-minded” customers, the largest percentage increase of any trend identified in the study.

CEOs agreed that customer expectations around corporate social responsibility are increasing, and that CSR will play an important role in differentiating an enterprise in the future. Customers are coalescing around organizations’ CSR profile – including, but not limited to “green” initiatives — and are increasingly demanding socially-minded products, services, and even supply chains.
CEOs also indicated that while customers have always cared about societal issues, those concerns are now more frequently turning into action as the more socially aware customer evaluates an enterprise’s CSR profile before making purchasing decisions.

At the same time, the survey’s respondents also considered the CSR reputations of their corporations as an important tool to attract and retain employees. They are also recognizing that their organizations are being held mutually accountable, along with the public sector, for the socioeconomic well-being of the regions in which they operate.

INFORMATION OMNIVORES:
Another key trend identified by the study is the rise of so-called Information Omnivores, representing customers who crave all types of information and often broadcasts its views and expectations worldwide via the Internet.

“These customers are swapping passive roles for much deeper involvement. ‘Consumers’ are becoming ‘producers,’ often creating entertainment and advertising content for their peers, while demanding flexibility and responsiveness from companies with whom they choose to do business,” the study found. “Although these customers are more demanding, the majority of CEOs do not see them as a threat, but as an opportunity for differentiation based on meeting the heightened expectations of this group, and capitalizing on new market opportunities that will emerge.”

Overall CEOs are planning a 22 percent increase in investments in the next three years to serve these more sophisticated and demanding customers.

The investment is even more pronounced among financial out-performers. CEOs of firms with higher net profit margin growth indicate that investments targeted at information omnivores will increase 36 percent over the next three years. The majority of these new investments will be dedicated to new operational capabilities that improve collaboration and product innovation, and that are more oriented to transparency and tailored to specific market segments.

According to IBM, the study also found that while increasing CEO concern about environmental issues has doubled over the past four years globally, this concern is not evenly distributed worldwide. Asia Pacific and European CEOs lead the world in focusing on environmental issues, followed by the Americas.

Overall, the CEOs see opportunities in CSR and are using it for their competitive advantage. They indicated that CSR is critical to maintaining current market share.

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2. IBM study highlights the commercial benefits of CSR

Tags: CEO spending, CSR, green consumers, IBM

Category: Applications, Climate change, Green corporations