30th October 2015

The clearest business case yet for good CR?

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Conducted in the United States by IO Sustainability and Babson College, and sponsored by Verizon and Campbell Soup Company, the study, called Project ROI, analysed existing research and data to assess CR’s value to society and to businesses’ bottom lines. The findings offer a clear roadmap of best practices for companies that want to improve the effectiveness and authenticity of their CR approach.

“The value and return on investment of CR programmes have long been disputed, with companies questioning the business value of them,” said Steve Rochlin, a co-CEO of IO Sustainability and one of the authors of the report. “Project ROI effectively re-frames the debate and shows that the issue is not whether companies should have CR programmes, but how well they design them to achieve their goals.”

Other key findings from Project ROI included:

Corporate responsibility nurtures, grows and protects brand and reputation value, potentially by up to 11 per cent of a company’s total value.

Over a 15-year period, companies with effective CSR programs have on average increased shareholder value by $1.28 billion. There is also an increased potential valuation for companies with strong stakeholder relationships of 40 per cent to 80 per cent.

CR impacts employees in very positive ways. Companies with a strong CR commitment can see increases in employees’ productivity by as much as 13 per cent. In addition, these companies can experience reductions in turnover by as much as 50 per cent, with workers willing to take up to a 5 per cent pay cut to work for a company doing CR well.

Professor Richard Bliss of Babson College said: “Today’s consumers are more educated, aware and connected than ever, and they are fully aware of corporations’ sincerity and authenticity when it comes to their commitment to CR. Companies that fail to recognize CR’s power beyond the shopping aisle are taking a myopic view. CR is a formidable influencer of trust, affinity, and loyalty. Companies must participate in CR with authenticity and transparency, or risk doing more harm than good to their reputations.”