The following is a list of the year’s best research findings related to CSR. Taken from top management journals such as the Academy of Management and the Journal of Marketing, these research insights help senior leaders kick-start their sustainability planning for 2011.
1. Innovation + Sustainability = Profit Xueming Luo (University of Texas) and C.B. Bhattacharya (European School of Management and Technology) show that innovative firms engaging in CSR have more satisfied customers. And those satisfied customers pay off. For a company with a market value of roughly $48 billion, a modest increase in CSR ratings led to annual profits in subsequent years $17 million higher than organizations that didn’t actively engage in CSR. Read more.
2. Beat Burnout, Boost Performance Adam Grant (Wharton Business School) and colleagues show helping others makes employees more committed to your company. And showing employees how their work benefits others boosts performance and beats burnout. As for how to do it, Grant suggests: “Managers may invite employees to contribute to higher-impact projects; introduce employees directly to the clients, customers, or patients who benefit from their work; or create new opportunities for participation in corporate social responsibility and volunteering.” Read more: Employee Volunteerism Boosts Loyalty and Feeling Helpful Prevents Burnout
3. Promote CSR Internally to Engage Staff C.B. Bhattacharya (European School of Management and Technology) and colleagues found that only 37% of employees were even aware of their firm’s CSR activities. Don’t let your staff be part of the uninformed majority! Involve employees in CSR programs, and develop programs that meet employee needs such as personal development and work-life balance. Read more.
4. Put Product Quality First, CSR Second Pat Auger (Melbourne Business School), Tim Devinney (University of Technology, Sydney) and colleagues show that consumers do care about ethical features—as long as they don’t compromise a product’s functional features. For equally good products, the researchers found 3 out of 5 people would spend more for the product that is ethically produced. Read more.
5. Get Buy-In Today for CSR Projects Tomorrow Todd Rogers (The Analyst Institute) and Max Bazerman (Harvard Business School) find that people are more likely to commit to CSR initiatives the further in the future their personal action is needed. So, getting internal commitment to a long-term strategy might actually be easier than finding dollars for a project next quarter. Read more.
6. Prioritize Your CSR Activities Julian Marshall (University of Minnesota) and Mike Toffel (Harvard Business School) outlines the four levels of sustainability, similar in concept to Maslow’s hierarchy of human needs. Ranging from human survival at the highest level to values and asthetic preferences at the lowest level, the framework helps managers and policy makers identify the most important sustainability activities to pursue. Read more. 7. Understand How CSR Drives Performance Francesco Perrini (University of Bocconi) and colleagues distilled 30 years of research into six categories of CSR activities that drive financial performance. The categories are: 1) the organization; 2) the customer; 3) society; 4) the natural environment; 5) innovation; and 6) governance. Read more.
8. Revisit Your Reputation Pascual Berrone (IESE Business School) and colleagues find that family-owned corporations demonstrate better environmental performance than other corporations. Why? The manager of a family-owned firm takes a long-term view of business success and places greater importance on reputation and recognition, since his or her personal reputation is tied to the company’s. Berrone’s observation: “If you want to improve your environmental performance – and your environmental reputation – you cannot treat your company solely as a money-making machine.” Read more.
9. Do Right by Your Stakeholders Jaepil Choi (Singapore Management University) and Heli Wang (Hong Kong University of Science and Technology) show that firms with strong stakeholder relations sustain periods of stellar economic performance and climb quickly out periods of poor performance. But it takes advance planning. If you try to build bridges once you’re in financial trouble, it’s already too late. Read more.
10. Use Standardized Metrics for Carbon Volker Hoffman and Timo Busch (both from ETH Zurich) developed a set of four standard metrics to build carbon into your company’s planning, activity, and reporting: 1) risk; 2) exposure; 3) dependency; and 4) intensity. These physical and financial indicators can help managers, investors and policy makers make more balanced assessments of companies’ relative carbon performance. A recent update to this research offers specific metrics for different sectors. Busch notes: “Standardized measures for carbon intensity may, in time, allow for ‘low-carbon’ competition across firms in an industry.” Read more.