Companies believe that when they are more open with stakeholders and place social responsibility at the core of their business strategy they will be more competitive, attract and retain the best talent, and gain access to new business opportunities.
This is one of the findings of a global study released by IBM. Many companies now see corporate social responsibility as a growth opportunity rather than just a regulatory compliance or philanthropic effort, with 68% of those surveyed focused on generating revenue through CSR activities. In addition, 54% believe CSR initiatives contribute to giving their corporations a competitive advantage.
Driving these beliefs is the rising influence of customers who, thanks to their ability to research and share information on the Internet, have become highly sensitised to a broad range of issues – everything from concerns about climate change, to product safety issues, to labour practices, to corporate financial accountability, to questions about whether corporations are returning enough of their profits to the community.
While customers are becoming the chief driver of this increased focus on CSR, 76% of businesses surveyed admit they don’t truly understand their customers’ CSR concerns. In fact, even businesses that feel they are knowledgeable and prepared to deal with CSR issues may not be. Nearly two-thirds of companies surveyed believe they have sufficient information about the sources behind their products and services to satisfy customer concerns, but half of those admit they don't understand their customers CSR expectations well.
Fuelling the customer focus on CSR, three-quarters of businesses report that the number of advocacy groups collecting and reporting information on them has increased in the last three years, as has the amount of information businesses are providing about the sourcing, composition and impact of their products, services and operations.
"The more information these stakeholders get, the more they want to know. This increased visibility of corporate behaviour is driving consumers' decisions on what to buy and who to buy from, who to work for, who to partner with, where to invest," says George Pohle, vice-president and global leader of IBM's Business Strategy Consulting Practice.
"It's not only critical for businesses to keep up with the emerging demands of their stakeholders, but to build CSR into the core of their business strategy. That way CSR is not viewed as a discretionary cost but an investment that will bring financial returns. And since customers are changing buying behaviour as a result of CSR, the financial impact can be dramatic."
The survey results are part of a new report released by IBM Institute for Business Value, titled, “Attaining Sustainable Growth Through Corporate Social Responsibility".