IBM: CSR is Good for Business

IBM has some advice for companies that are tempted to ease up on their commitment to corporate social responsibility during the recession: Don’t.

To the contrary, IBM argues companies need to get better at collecting data that measure their social and environmental impact, whether that be a carbon footprint, the results of factory inspections or life cycle analyses of products they sell.

In a new report issued today, based a survey of 224 senior executives, IBM says there are “significant gaps” between the corporate responsibility goals of companies and their ability to achieve them. The survey found:

• Companies aren’t collecting and analyzing the right information about CSR or aggregating it often enough.
• Few are collecting CSR data from their suppliers.
• Most don’t understand the concerns of their customers when it comes to CSR.

“There is a gap between the aspirations and the capabilities that are necessary to realize those aspirations,” says Eric Riddleberger, IBM’s business strategy consulting global leader, who heads up the company’s corporate social responsibility consulting efforts.

You won’t be surprised to hear that IBM is ready to help companies close those gaps. Riddleberger heads up a group of about 3,500 business strategy consultants, most of whom do some work around corporate responsibility and sustainability.

You can find the IBM survey here.  To me, what’s more interesting than the survey is the fact that IBM is putting so much of its intellectual capital, as well as its marketing dollars, behind sustainability. My FORTUNE colleague Jeffrey O’Brien wrote a terrific story recently about the substance behind IBM’s Smart Planet campaign; if you missed it, it’s well worth checking out. IBM’s consulting work, meanwhile, is driving sustainability deeper into hundreds of other companies.

IBM’s view -- again, not surprising for an IT company -- is that the spread of the Internet has made CSR a front-burner issue. In a report called Attaining sustainable growth through corporate social responsibility, IBM says:

"Companies are more visible, more exposed, than ever before, especially as they expand their sphere of operations and their markets. Watchdog organizations are working hard to keep people aware of what businesses are doing.

"Since 1990 the Web has spurred the growth of more than 100,000 new citizen groups devoted to social and political issues. And the torrid pace of information traveling the Internet is transforming consumer expectations as customers gain continuous access to special-interest action plans and third-party scorecards that rate companies on environmental practices and ethical concerns. In fact, companies can easily lose control of their own brands and reputations.

"Customers are joining with activist NGOs and advocacy groups, who no longer depend on door-to-door canvassing and street demonstrations to bring environmental and fair trade issues to worldwide attention. They use blogs, podcasts, text messaging, MySpace and YouTube to proliferate their messages."

Whatever the reason, the people at IBM are persuaded that CSR helps drive shareholder value. Businesses that get CSR right

"will have a significant advantage attracting investors, talent and customers, developing new products and services, and gaining access to new markets and new opportunities. It also will help them improve operational efficiency and reduce costs, and meet regulatory requirements, which can allow them to qualify for incentives and avoid penalties"

All this would indicate that CSR is going mainstream, right? Well, maybe. Harvard Business School graduates its class of 2009 next week and, according to The New York Times, about 20 percent of them have signed a student-led pledge called “The MBA Oath” that says the purpose of a business executive is to “serve the greater good by bringing people and resources together to create value that no single individual can create alone.”

That’s nice, but what about the other 80 percent?