Weber Shandwick's Planet 2050 corporate responsibility (CR) practice released the results of a proprietary analysis that demonstrated the rising prominence of CR on the leadership agenda. Planet 2050 examined Global Fortune 100 companies’ shareholder letters in annual reports from 2003 and 2007 to assess how frequently top management mentioned corporate responsibility initiatives as a past accomplishment or leading priority for the coming year. Corporate responsibility included any reference to societal and/or environmental issues.
Findings:
According to a Burst Media survey, consumer recall of advertising that includes "green" messaging is high with 37% saying they frequently recall green messages and an additional third recalling it occasionally.
Nielsen Online released a study that finds that blogger buzz around sustainabilility grew by 50 percent in 2007. Early 2007 buzz was dominated by global warming, but issues such as renewable energy and resource conservation increased. The study also reports that corporations that greenwash their advertising and PR will quickly turn bloggers into the dreaded Badvocates. Sustainability bloggers' number one greenwashing discussion topic is "contradictory actions."
The University of Western Ontario's Ivey School of Business conducted a series of experiments to determine if it pays companies to invest in social responsibility, reported in The Wall Street Journal (May 12, 2008). The study concluded that consumers were willing to pay a slight premium for ethically made good and would buy unethically made goods only at a steep discount. Futher, it determined that a little social responsibility goes a long way--companies don't necessarily need to go all-out with social responsibility to win over consumers. It seems that once companies hit a certain ethical threshold, consumers reward them by paying higher prices.
The Economist Intelligence Unit released a report on business sustainability. The reports suggests that companies are at an early stage in developing an understanding of sustainability. While 53% of firms worldwide surveyed claim to have a coherent sustainability policy, only half of them extend this beyond internal operations to supply chains. Only 29% say their company has a coherent strategy that covers the whole business and its supply chain. The study was conducted among 1,200 executives worldwide, along with in-depth interviews with leaders of businesses and non-governmental organizations (NGOs) as well as sustainability experts. Key findings are:
The blogosphere is exploding with talk about "sustainability," with buzz volume growing more than 106% since September 2006, when blogger messages on the topic totaled 83,000. By December 2007, messages jumped to 172,000, according to Nielsen. (Advertising Age, March 31, 2008).
A McKinsey survey (February 2008) finds that 60 percent of global executives view climate change as important to consider within their companies' overall strategy. Seventy percent see it as an important consideration for managing corporate reputation and brands, and over half say it's important to account for climate change in such varied areas as product development, investment planning, and purchasing and supply management. However, many respondents report their companies consider climate change only occasionally when managing reputation and brands, developing new products or managing environmental issues.
According to a McKinsey Quarterly survey (January 2007), almost half of US executives believe they and their peers should play a leadership role in publicly shaping debate and addressing sociopolitical issues, yet only one-seventh of respondents consider themselves to be playing that role now.
Among those who say they play a leadership role (14%), the top enablers of their leadership activities are (1) a strong network of peers with an interest in public issues and (2) a comprehensive set of facts about, and an understanding of, public issues.
The most important barrier to playing a leadership role is lack of time followed by fear of negative publicity. Those who play no role or only some role in addressing public issues are much more likely to cite fear of negative publicity as a barrier.
The 2007 PRWeek/Barkley Public Relations Cause Survey reveals that more than ever consumers expect companies to give back. In turn, those companies are responding with cause-related programs that engage consumers and their employees. (October 22, 2007)
According to the 2007 Cone Cause Evolution Survey, two-thirds of Americans consider a company’s business practices when deciding what to buy, 87% would switch from one brand to another if the other brand was associated with a good cause (up 31% since 1993), 92% value companies that promote social causes, and 83% say companies have a responsibility to help support them. (Advertising Age, July 12, 2007)
A McKinsey & Co. study of 1,144 top global executives found that 79% predicted that corporations would bear at least some responsibility for dealing with future social and political issues. It is the CEO’s responsibility to address such issues, according to 75% of those surveyed. Only 3% of surveyed business executives said that they do a good job dealing with social pressures.
An increasing number of companies are reaching beyond simply practicing good corporate citizenship to setting sustainability goals, according to a BusinessWeek special report. Sustainability, or “meeting the needs of humanity without harming future generations,” is a new competitive advantage companies are beginning to foster during an age of limited resources, increased internet watch dog groups and new environmental regulations. According to the Social Investment Forum trade association, “assets of mutual funds that are designed to invest in companies meeting social responsibility criteria have swelled from $12 billion in 1995 to $178 billion in 2005.” Companies such as Goldman Sachs, Deutsche Bank Securities, UBS, Citigroup, Morgan Stanley and other brokerages have formed teams to assess the benefits of sustainability due to the sudden investor demand for information.
Innovest presented a list of the world’s 100 most sustainable corporations at the 2007 World Economic Forum. Advisors developed a metric of 120 different factors, such as energy use, healthy and safety records, financial performance, litigation, employee practices, regulatory history and management systems for dealing with supplier problems, to measure the benefits of sustainable practices. To see the full list of the Word’s Most Sustainable Corporations, click here.
WPP Group’s ReputationZ study conducted among consumers in the U.K. and U.S. during December 2006 and January 2007 found that consumers are more concerned with product quality and consumer fairness than corporate social responsibility. WPP’s corporate reputation model shows that public responsibility is the least influential factor on its own, accounting for just 11% of sales effect compared with leadership and success (47%) and consumer fairness (42%). However, the study suggests that consumers are still moved by ethical issues: British consumers say they are more likely to buy products and services from a company that is active in the community (48%), carbon neutral (27%), labeled fair trade (26%) and involved in RED fundraising (11%). (Marketing Week, April 26, 2007)
Advertising Age hosted its first Green Conference in New York on June 12, 2007. Kicking off a panel discussion, Carol Yang, Timberland’s VP – Corporate Marketing, encouraged the audience: “Don’t treat [the environment] as only a marketing promotion. You have to make sure green is integrated in all your business practices.” Authenticity and transparency are key to making eco-marketing work, she stated. “If a company is honest about its strengths and weaknesses, customers will be more forgiving.” (Ad Age, June 12, 2007)
Fraser Consultancy recently released their 2006 Ethical Reputation Index, measuring 1,000 UK consumers' perceptions of corporate behavior. Of the 50 companies included in the survey, The Body Shop, Marks & Spencer, Boots, Google and Co-operation received the highest honors. Meanwhile, consumers ranked McDonalds, Burger King, Ryanair, Nike and Shell as the least ethical companies. Companies which ranked high on the index are founded on ethical principals and have a high level of consumer trust. Companies that sell unhealthy products, do not appear to care about the environment, show low levels of respect for the privacy of individuals and exploit their employees ranked low on the index.
Many environmental groups are beginning to partner with corporations. BusinessWeek provides a few examples of companies who are inviting environmentalist to the corporate table:
Commenting on the new trend toward corporate America going green, Silicon Valley Toxics Coalition founder Ted Smith remarks, "Companies have decided it is better to invite us into the tent than have us picketing their keynote speeches."(BusinessWeek, March 17, 2007)
Fortune suggests that “fresh ideas and being green” are key to a great reputation. Its annual America’s Most Admired Companies survey is conducted among 3,322 executives, directors and securities analysts who rank companies on a variety of eight reputational criteria, from investment value to social responsibility. According to Fortune, the top three Most Admired companies for 2006 are among the most vocal about how green they are:
Results were published from the eighth-annual Harris Interactive/The Wall Street Journal survey of the world’s best and worst corporate reputations, as determined by consumer ratings. According to The Wall Street Journal, social responsibility is being recognized by consumers and is reflected in reputation scores. Microsoft was ranked number one in the survey, boosted by the philanthropic work of the Gates. Social responsibility also contributed to a positive overall ranking for Whole Foods (#12) which received the highest score of any company for social responsibility.
The New York Times reported on web sites that elicit consumer feedback about the social and environmental practices of companies and industries. Some newly launched sites attempt to paint a balanced picture of the good and the bad so that consumers can make informed decisions on where they spend their money. On http://www.dotherightthing.com/, for example, users submit a company for evaluation. The evaluation culminates in a social performance score which can change as others weigh in. Visitors can share stories, learn about a company’s activities and track the social performance of a company of interest.
A PricewaterhouseCoopers survey of 1,084 global chief executives reports that 40% are concerned that global warming will affect their business. Japanese and South Korean CEOs are the most concerned (70% and 60%, respectively) while American, Italian and Russian CEOs are the least concerned (18%, 14%, 3%, respectively). These levels of concern don’t necessarily align with levels of investment in global warming – 26% of US CEOs say they have invested resources to deal with the threat of global warming (vs. 18% concerned). British companies have the greatest disparity between concern and investment with 75% CEOs saying they’ve invested vs. 41% concerned (75% vs. 41%).
The relationship between corporate social responsibility and reputation management has never been so important. In Weber Shandwick's new Safeguarding Reputation™ survey, global business executives overwhelmingly believe that corporate responsibility directly affects company perceptions and hastens crisis recovery:
The most recent McKinsey & Company Quarterly global survey revealed the recognition of executives that the role of themselves and their companies goes beyond satisfying shareholders. The survey included interviews with over 4,000 executives across 116 countries and found that:
The Green Business News recently interviewed Janet Blake, head of global corporate social responsibility (CSR) at BT. Blake explains that "[a]s a service company brand, reputation, values and image are essential to our success and CSR activities help in all these areas." She also further points out that there is a strong financial return on CSR (BT estimates that about £2.2bn revenue per year is tied to CSR), not to mention an improvement in customer satisfaction - BT estimates that for every 10 percent rise in customer awareness of CSR, there is a related 1 percent increase in customer satisfaction.
According to a recent survey conducted by Cone Inc. and AMP Insights, 13-25-year-olds favor companies who practice corporate social responsibility. For example:
The Daily Transcript, in honor of their 120th print anniversary, highlighted the contributions of local San Diego businesses in community initiatives. As Paul Jacobs, CEO of Qualcomm, explains “[w]ith industry leadership comes many opportunities - and responsibilities - to have a positive impact on our communities.” A recent Giving USA survey revealed that corporate charitable giving in 2005 reached approximately 14 billion. And a study among 90 companies conducted by the Committee to Encourage Corporate Philanthropy showed that nearly nine out of ten companies surveyed encourage volunteer programs for their employees. Further, the article points out the reputational benefit of corporate responsibility - “[b]ottom line, the generosity of local and national corporations goes a long way toward improving the image of the company on all levels. And, if that happens to boost the reputation of the company CEO at the same time, all the better."
The Globescan's Global CSR Monitor 2003 survey found that among individual shareholders in G20 countries, 56 percent believe socially responsible companies are more profitable than irresponsible companies and 18 percent say they have bought or sold stocks because of the company's social or environmental performance. Moreover, another key finding is that consumers expect companies to go beyond traditional economic roles.
The Golin Harris Corporate Citizenship Index survey found Americans want corporate America to be more authentic. The 5,000 sample survey rated 152 brands on 12 drivers. The top 10 percent of brands with the highest corporate citizenship ratings were Ben & Jerry's, Target, Patagonia, SC Johnson, Gerber, Southwest airlines, Johnson & Johnson, The Body Shop, UPS and 3M. The five most trusted sources of information on corporate responsibility are word-of-mouth, people affected by an issue, newspapers and their web sites, the Internet, and TV stations and their web sites. GolinHarris' fourth annual survey on this topic also found that checkbook philantrophy is not enough. Company citizenship must be credible and not opportunistic. Americans are watching carefully.