Corporate Social Responsibility (CSR) programs are increasingly popular corporate marketing strategies. This paper argues that CSR programs can fall along a continuum between two endpoints: Institutionalized programs and Promotional programs. This classification is based on an exploratory study examining the variance [...]]]> Journal of Business Ethics
By Julie Pirsch, Shruti Gupta, Stacy Landreth Grau
2006

Corporate Social Responsibility (CSR) programs are increasingly popular corporate marketing strategies. This paper argues that CSR programs can fall along a continuum between two endpoints: Institutionalized programs and Promotional programs. This classification is based on an exploratory study examining the variance of four responses from the consumer stakeholder group toward these two categories of CSR.

Institutionalized CSR programs are argued to be most effective at increasing customer loyalty, enhancing attitude toward the company, and decreasing consumer skepticism. Promotional CSR programs are argued to be more effective at generating purchase intent. Ethical and managerial implications of these preliminary findings are discussed.
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AdAge By: Jackie Luan, Kusum L. Ailawadi May 24, 2011

Pepsi’s Refresh Project funded 238 ideas for improving communities. The company’s “human right to water” program pledged more than $15 million for safe water across the world. Walmart has pledged [...]]]> Yes, If It Directly Affects Consumers’ Experience With the Brand, New Tuck Research Finds

AdAge By: Jackie Luan, Kusum L. Ailawadi
May 24, 2011

Pepsi’s Refresh Project funded 238 ideas for improving communities. The company’s “human right to water” program pledged more than $15 million for safe water across the world. Walmart has pledged $2 billion in cash and food donations to food banks and, in 2009, it unveiled its Sustainable Product Index.

Like Pepsi and Walmart, many companies engage in a spectrum of corporate social responsibility initiatives and invest heavily in publicizing them. While the intrinsic satisfaction of doing good is important, as author Tim Sanders has argued, CSR programs tend to be meaningful and sustained only when they align corporate financial needs (profit, revenue, growth) with social needs (people, community, planet). So which, if any, of the plethora of CSR initiatives beget positive returns?

The truth is that, until recently, we didn’t know.

Several cross-sectional studies spanning firms across different industries have correlated CSR performance with financial performance. The correlation is often positive, but there are also several negative and insignificant effects. Add to these mixed results the ambiguous direction of causality (meaning, does good corporate citizenship lead to better financial returns or do financially sound companies devote more resources to CSR?); the inconsistency among studies with respect to which CSR dimensions do and do not generate positive returns; and that different stakeholder groups respond differently, and it becomes clear that we don’t really know much about whether, how, and how much CSR benefits a company.

We set out to answer this question for a major sector of the economy — consumer goods retail. We collected field data from more than 3,000 grocery shoppers regarding the major grocery retailers in their markets. We measured their perceptions of retailers’ CSR on four dimensions, as well as other attributes such as price, merchandise quality, service and assortment. We then estimated a model of how these variables affect consumers’ attitudes toward the retailers and their share of wallet. Here is what we found.

First, all four dimensions of CSR performance — environmental friendliness, treating employees fairly, community support, sourcing from local growers and suppliers — positively influence consumers’ attitudes toward a retailer. But consumers seem to modify their purchase behavior only when the CSR domain directly affects their actual experience with the company or brand. In our context, broad initiatives like environmental friendliness and community support build only goodwill, but initiatives like offering locally sourced products and fair employee compensation — actions related directly to the products and people that consumers face — bring both goodwill and a higher share of wallet from consumers.

Second, this economic return is significant and meaningful. For instance, if a retailer is able to improve consumers’ perception of its fair treatment of employees by one point on a five-point scale, the consequent increase in share of wallet is approximately 1.7 percentage points. The gain from a similar improvement in local sourcing is even more pronounced at more than 2 percentage points. These numbers appear small, but they represent a sales lift of 10% to 15% for the average retailer in our study.

Third, if a retailer chose to leverage its improved CSR perception into higher prices rather than higher share of wallet, the calculations from our model show that a one-unit increase in employee fairness perceptions translates to a price premium of about 12%, and a similar increase in local product sourcing translates to a price premium of about 16%.

Fourth, much, but not all, of this benefit is direct: Consumers patronize the company because they see personal benefits from the CSR initiatives and because the initiatives resonate with their own values. But an indirect benefit can occur through consumers’ perception of how fair the company’s prices are. Consumers don’t just respond to the price charged; they also respond to how fair they think the price is. High prices are considered fairer if they can be attributed to “good” motives like CSR efforts or costs rather than to “bad” motives like profit-taking. We find that as much as 15% of the share-of-wallet gain from the perception of employee fairness accrues through improved perceptions of price fairness. Like the direct effect, this indirect benefit is not equal across different CSR initiatives. There is no indirect benefit of local product sourcing — indeed, price fairness perceptions are not better for companies that offer locally produced products.

What does it all mean? Engage in meaningful CSR. Integrate your CSR efforts into consumers’ direct experience with your brand, and monitor their response to make sure your initiatives and your message resonate with them. Recognize that just because you spend money on CSR initiatives does not mean the consumer will think it’s fair to charge higher prices. But don’t shy away from CSR initiatives that have real meaning to consumers even if they are expensive, because the returns in customer loyalty are substantial enough to more than cover those costs.

ABOUT THE AUTHORS
Kusum Ailawadi is the Charles Jordan 1911 TU’12 Professor of Marketing at the Tuck School of Business, Dartmouth College. Jackie Luan is assistant professor of business administration at the Tuck School of Business, Dartmouth College.

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NEW YORK – Blackstone (NYSE: BX) announced today that four portfolio companies have signed on to pursue environmental sustainability programs. Equity Office Properties, LXR Luxury Resorts and Hotels, Performance Food Group, and Pinnacle Foods have selected test sites at which to roll-out a host of operational improvements and technology upgrades [...]]]> CSRWire
Dec 05, 2011

NEW YORK – Blackstone (NYSE: BX) announced today that four portfolio companies have signed on to pursue environmental sustainability programs. Equity Office Properties, LXR Luxury Resorts and Hotels, Performance Food Group, and Pinnacle Foods have selected test sites at which to roll-out a host of operational improvements and technology upgrades to reduce energy, water and waste-related costs. The goal is to roll-out the most effective initiatives from the test sites across each company’s portfolio of facilities and locations, with annual cost savings estimated to exceed 10% of total energy costs. Today’s announcement is part of an ongoing effort by Blackstone to focus on sustainability across the portfolio of companies it manages on behalf of its investors, which include 36 million pensioners globally.

“By partnering with companies in our portfolio with the greatest energy spend to improve environmental performance while lowering costs, we can make a substantial impact,” said Don Anderson, Blackstone’s Chief Sustainability Officer. “Blackstone’s large-scale platform allows companies in our portfolio to leverage technology and services purchases, and as importantly share knowledge across industries and geographies on how best to tackle sustainability initiatives.”

ICF International and JDM Associates, leading providers of sustainability solutions, have been engaged to help apply best practices at each test site. The four companies rolling out test sites currently use Summit Energy for energy procurement and associated web-based performance tracking, which allows carbon impact and other sustainability achievements to be documented.

Other Blackstone portfolio companies are expected to join this initiative in the coming year.

About Blackstone:
Blackstone (NYSE:BX) is one of the world’s leading investment and advisory firms. Blackstone seeks to create positive economic impact and long-term value for its investors, the companies they invest in, the companies they advise and the broader global economy. Blackstone does this through the commitment of their extraordinary people and flexible capital. Their alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-oriented funds and closed-end mutual funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com. Follow us on Twitter @Blackstone.

For more information, please contact:
Christine Anderson The Blackstone Group
Phone: +1 (212) 583-5182

This report from Brighter Planet both provides a benchmark for the status of employee sustainability programs in the US as they continue to evolve, and helps to inform their development by highlighting factors that contribute to their success.

A Gallup study estimates that more than $300 billion in productivity is squandered [...]]]> Source: Brighter Planet

This report from Brighter Planet both provides a benchmark for the status of employee sustainability programs in the US as they continue to evolve, and helps to inform their development by highlighting factors that contribute to their success.

A Gallup study estimates that more than $300 billion in productivity is squandered within the U.S. workforce due to disengaged employees.  Furthermore, the same Gallup study indicates that organizations with an engaged workforce have 2.6 times the earnings per share growth rate compared to organizations in the same industry with a less-engaged work-force.

The shift to sustainability is a cultural shift, and it’s one that must happen at all levels within an organization to be truly effective.  Employees represent a critical element in an organization’s efforts to fuse sustainability with profitability.  An organization’s success in meeting these goals can rise or fall with its ability to empower and incentivize its employees to integrate sustainability into  their  day  to  day  activities  and  decision  making.
This  does  require planning and effort. But institutions that have invested in the right systems  and structures find that these are yielding not only environmental and social benefits but also helping the bottom line.

Fewer than 15% said their employer had an employee sustainability engagement policy.

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SLM is proud to launch a high-impact, tailored version of our latest research report in collaboration with our partner, Zumer Interactive – Sustainability 2.0 – Current trends at the confluence of social media and CSR. Our goal for this report was to understand how the current intersection of social media [...]]]> Source: Sustainable Life Media

SLM is proud to launch a high-impact, tailored version of our latest research report in collaboration with our partner, Zumer Interactive – Sustainability 2.0 – Current trends at the confluence of social media and CSR. Our goal for this report was to understand how the current intersection of social media and sustainability is being managed by successful Brands – and to provide executives, brand communicators, and all those involved in social media execution the insights necessary to make informed strategic decisions in this space.

We started by analyzing the activities of Fortune’s 50 most admired companies across 4 major social media platforms, and supplemented this data with qualitative interviews with over 40 executives from today’s leading brands. Together, these pieces create the most complete look at the intersection of social media and sustainability available today.

From our vantage point, this intersection of social media and sustainability is a right-of-passage for companies seeking Authenticity, a momentum-changing force for companies in today’s economy. The rewards for companies that manage authentic communications are enormous. Authenticity not only allows companies to more effectively manage their external reputations and brand perceptions, but it encourages greater employee engagement and improved recruitment opportunities. And the most authentic companies are able to open up new market opportunities because they avoid being defined by market perceptions.

Additional Report Findings Include:

1. 70% of executives we spoke with confirmed that social media and sustainability are at the forefront of their strategies to drive customer loyalty, retention and conversion.
2. Reports are getting shorter and more interactive: The average sustainability report has reduced in length by more than 25% during the past four years while on average, 60% of companies are including videos in their sustainability reporting.
3. 82% of companies will increase their investment in sustainability-focused activities on Facebook in 2011
4. Twitter is a magnifying glass for promoting corporate sustainability initiatives – corporate investment in the platform will double by 2015
5. While sustainability-themed blogging is still a minimal part of the overall blogosphere (1-2%),there is untapped opportunity for companies that can effectively engage with bloggers to devise mutual solutions around

The report is an extension of the Network for Business Sustainability’s systematic [...]]]> This report is designed to help senior executives and decision-makers new to sustainability navigate the strategic decision-making process for managing their firm’s environmental impacts. It presents a high- level guide and suggests tools and additional resources for measuring and valuing environmental impacts.

The report is an extension of the Network for Business Sustainability’s systematic review of the body of research on measuring and valuing environmental impacts. Synthesizing data from 180 studies, the review presents the most comprehensive compilation of high-quality knowledge on this topic to date.

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Instead of asking does Corporate Responsibility (CR) improve business performance, this research focuses on how CR can improve business success. Specifically, the research shows how improving aspects of Environmental Social and Corporate Governance (ESG) can [...]]]> Corporate Responsibility, Market Valuation and Measuring the Financial and Non-Financial Performance of the Firm
Source: European Alliance for CSR

Instead of asking does Corporate Responsibility (CR) improve business performance, this research focuses on how CR can improve business success. Specifically, the research shows how improving aspects of Environmental Social and Corporate Governance (ESG) can positively impact on individual elements of what has traditionally been referred to as non-financial performance; and in turn, how these impact on the drivers of value-creation.

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This report examines the relationship between total shareholder return and the management of environmental and social impacts in 33 FTSE (Financial times share index) companies that have measured and managed their corporate responsibility through Business in the Community’s Corporate Responsibility Index (CR Index) in each of its six years. The [...]]]> Business in the Community

This report examines the relationship between total shareholder return and the management of environmental and social impacts in 33 FTSE (Financial times share index) companies that have measured and managed their corporate responsibility through Business in the Community’s Corporate Responsibility Index (CR Index) in each of its six years.

The results revealed that FTSE (Financial times share index) companies that actively managed and measured corporate responsibility issues outperformed the FTSE 350 on total shareholder return by between 3.3% and 7.7% throughout the period 2002-2007

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