Does your company distinguish between Corporate Philanthropy (making charitable donations) and CSR (committing to a long term positive impact in your operations)?

There are some good reasons why you should.

Good Business is Good FOR Business

  • An 11 year Harvard University study found that companies which were stakeholder focused achieved 4 times the growth rate of shareholder focused companies.
  • A DePaul University study found annual sales revenues higher in companies with a stated commitment to ethical business.

Access to Capital

  • A new breed of investors expects the companies they invest in to be socially responsible.
  • In 2010, about $3.07 trillion dollars (12% of all investments) were placed in socially responsible investments in the US.
  • In the same year there were 879 Green, Social and Ethical Investment funds in Europe, representing €75bn in assets under management.

Increase Efficiency, Decrease Costs

  • A comprehensive CSR program will have effects like lowering waste production, improving your water usage and increasing efficiency all of which will directly impact your profits.
  • For a one-time investment of €2.3 million, Dow Chemical Co projected savings of €5.4 million each year from reducing production of 26 toxic chemicals.

 
Doing well for CSR

Branding Benefits

  • One of CSR’s most exciting effects is the ability to enhance the brand image of your company.
  • Global brand Coca-Cola has an estimated 96% of its value derived from its brand.
  • American Express derives 84% of its value from branding.
  • CSR accounts for more than 25% of image and reputation impact on your customer satisfaction.

Minimize Risk Exposure

  • Company reputations take years to build but can be wiped out in a single moment.
  • Toy giant Mattel was hit with a product safety scandal in 2007, and it took them 3 years to recover to pre-scandal levels.
  • Megallen Metals in Australia was forced to immediately cease operations and placed under Care & Maintenance when they were found responsible for lead contamination in 2007. They estimate the direct cost to the company to be US$>50M. The cost of lost revenue is likely to be in the range of US$200 – 400 million.

 
Customer Appeal

  • A CSR Europe/MORI study in 2000 showed that 70% of European consumers say a company’s CSR commitment is important to their buying decisions.
  • 1 in 5 would be willing to pay more for a responsible product.
  • 1 in 6 would be prepared to boycott a product because of a manufacturer’s reputation.

Reduce Staff Turnover, Improve Product Quality

  • Employees want to be proud to work for their employers, and they are motivated by far more than their benefit package.
  • Since Novo Nordisk launched their Values in Action Programme, they have seen a 5% drop in staff turnover.
  • 78% of employees would rather work for an ethical and reputable company than receive a higher salary.

Keep Ahead of your Competition

  • Corporate interest in CSR will continue to grow locally and globally.
  • Regulatory oversight will influence the partnership choices that businesses make.
  • Companies that are ahead of CSR regulations will be primed to take advantage of new business opportunities in this new business landscape.