Following on from a similar study conducted in 2000, international reputation analysis firm Echo Research has examined how CSR has progressed as an influence on corporate behaviour and how the challenges it faces will change in the future.
Echo Research’s CEO, Sandra Macleod, commented "In a year when September 11, the collapse of Enron and the expansion of the UN Global Compact all provoked global business and political leaders to put CSR top of mind, our research shows increased effort to manage CSR effectively and a greater and more positive profile in the media as a result."
Ford and BP still top Echo’s CSR Perception Index; With South African Companies in a League of Their Own<
In the report, Echo’s CSR Perception Index showed Ford, BP, IBM, GlaxoSmithKline to be perceived as leaders and role models in the field and setting benchmarks by which corporations can judge their CSR reputations. Those top positions were held by BP and Ford last year, followed by The Body Shop and McDonald’s.
These results from the study show which companies in the UK, US, Germany, France and South Africa are best recognised, both in the media and by their peers, for outstanding performance in CSR. In general, South African companies stand apart for reaching out to remote communities and addressing fundamental issues such as HIV/Aids and education. The reasons for nomination appear beside each company (where a reason was given):
1 Ford The company’s excellence includes "Time Budget" for employees to devote to CSR activity
2 BP Social reporting truly integral to the business
3= IBM Outstanding work in education, which is so key to world development
3= GlaxoSmithKline Very prominent among pharmaceutical companies
5= Co-Op Bank CSR deeply embedded in their strategy
5= Coca Cola Successfully link social responsibility to their brand, and ‘walk the talk’
5= Anglo-American Reaching out to remote communities, often with little publicity payback
8= Shell Strong on reporting values and on stakeholder dialogue
8= BT CSR intrinsic to the strategy of the company
10= ABSA Bank Widespread uplift in education, bursaries, HIV/AIDS
10= Body Shop Brand strength is based on CSR
10= Camelot Excellent social reporting
10= Credit Suisse Progressive in the product area
10= Johnson and Johnson Continuing their historically strong values and programmes
10= South African Breweries (SAB) Extremely proactive
Other key findings of the report are:
COMPANIES NEED TO MAINTAIN BUSINESS JUSTIFICATION AND SOCIAL CREDENTIALS
& INVOLVE MIDDLE MANAGEMENT TO MAKE IT HAPPEN
Corporate social responsibility is rising in prominence – it is now perceived as a top-table issue, delivering real business benefits as well as giving back to communities.
Over 80% of corporate CSR decision-makers were very confident in the ability of good CSR practice to deliver branding and employee benefits, despite some scepticism (less than 10% thought that CSR really helps the socially excluded to become more "included").
76% of corporate CSR decision-makers spoke of the need for CSR to be owned and championed at board level in order for it to be successful. Middle management is now seen as a key group to convince and engage with specific CSR targets.
In order to stand its ground, CSR must be measurable.
SEPTEMBER 11 HAS HIGHLIGHTED THE ISSUE, YET DIVIDED OPINION
September 11th produced an explosion in media discussion of CSR, but opinion among CSR decision-makers is split as to whether its long-term impact is positive or negative. On the positive side, many feel that it will lead to a more caring corporate society, and that it is in the interests of business to work towards a stable social context in which to do business. However, some believe any positives will be outweighed by the potentially negative economic impact. Outside the United States, reverberations of 9-11 are limited as other nations tend to be more concerned with their own issues, and have long had to deal with acts of terrorism and other atrocities.
ETHICAL INVESTMENT SET TO BE MAIN BENEFICIARY OF CSR IN THE FUTURE
Ethical investment funds will be a strong beneficiary of CSR in the future. It is possible, therefore, that the much postulated ‘conflict of interest’ between long-term business development and short-term shareholder value is diminishing. Media coverage of ethical investment rose by 92% year on year.
Pointers for the future
Looking to the future, Echo Research believes several factors should be watched for their impact on the development of CSR:
1. the speed with which economies move out of (in some cases shallow) recession, since this has tended to affect many aspects of corporate budgets;
2. the degree to which companies succeed in demonstrating the contribution of CSR to their business success, for which measurement and benchmarking are very important;
3. the possibility of resurgence of the anti-capitalism movement after September 11th , which affects public perceptions of corporates;
4. the impact on perceptions of the sustainability debate of the Rio+10 world environmental summit in South Africa this autumn;
5. the frequency of future well-publicised cases of poor corporate governance, as in the case of Enron, excessive "fat cat" rewards etc;
6. the rate at which "ethical investment" continues to grow, including the performance of indices such as the FTSE4Good.