CSR, Environmental Programs Good for the Bottom Line, Report Finds

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SAN FRANCISCO, Calif. -- With the global financial meltdown sending every company "back to the blackboard," a new report from the Economist Intelligence Unit finds that almost three-quarters of businesses with CSR programs in place are seeing financial benefits as a result of achieving environmental goals.

The report was released at the start of the Economist's "Corporate Citizenship" conference yesterday in San Francisco. Kicking off the conference, Matthew Bishop from the Economist news magazine and Nigel Holloway of the Economist Intelligence Unit's North American division looked at the report from the perspective of the current economic situation.

Describing the steady bad news coming out of global financial centers as "the collapse of capitalism as we know it," Bishop said times like this serve as a testing time for CSR programs. Bishop asked, are companies truly committed to social and environmental responsibility -- "is it embedded in the DNA of these companies?"

Although the EIU's report was conducted in September -- before the worst of the financial crisis sunk in -- the results show that even in the face of a worrisome downward trend in global markets, companies that have taken serious steps toward improving their social and environmental performance are seeing gains from those programs.

In the survey, which included 566 U.S.-based executives, as well as in-depth interviews with 16 executives at companies and organizations leading the charge on CSR performance, found that 74 percent of respondents believed or had witnessed that corporate citizenship programs can help increase profits at their companies.

One example Holloway offered was of Herman Miller -- a company we've covered regularly at GreenBiz -- which said that the green practices it has adopted led to a 32 percent increase in revenues at the company.

In describing the results of the survey, Holloway explained that results like Herman Miller's help build the business case for CSR practices amongst companies that have not yet fully committed to those goals. But he cautioned that talking dollars and sense is not always the best way to sell these types of projects.

Some companies succeed in going green because they've harnessed the passion of their employees, not because the c-suite sees the monetary benefits from doing so. Holloway suggested that a key early step to deciding how to promote green goals from within is to know if your company will be more moved by facts and figures or by emotional appeals to action.

Also playing into internal green strategies is the fact that that younger workers -- whom Bishop pegged at 35 and under -- are more "values-driven" than the older workforce, according to Bishop and Holloway. The report quotes Peter White, Procter & Gamble's director of global sustainability, as saying "Generation Y employees have a passion for this: they want to make sure that the company they joined is doing the right thing for the environment."

One key step in achieving success, Holloway explained, is taking advantage of a "virtuous circle" from publicly announcing ambitious CSR goals. By making these goals part of the public record, companies feel more pressure both to work to achieve them, but also to set the bar higher than they might otherwise: if you don't set ambitious goals, Holloway said, "there's really no point in making them public."

The full report, "Corporate citizenship: profiting from a sustainable business," is available for free download at http://www.eiu.com/sponsor/corporatecitizenship.

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