Are top-profile issues good for the bottom line?
Corporations have traditionally avoided political and social controversies, on the theory that wading in would interfere with their primary mission of maximizing profit. No longer. Many executives are concluding that taking a stand on some issues, far from conflicting with the bottom line, has become essential to protecting the brand and balance sheet. These companies have found that their customers have expectations in this area – and are quick to express dissatisfaction on social media when those expectations are not met. This trend is accentuated by the rising market importance of Millennials, who are especially inclined to buy from and work for businesses that align with their values.
Here are some key takeaways:
The political polarization of the broader society may be replicating itself in the business world.
The growing power and reach of social media is a force multiplier that has left companies feeling, in the words of one expert, “just one bad tweet away from getting in trouble.”
Millennials are now the single largest demographic group in U.S. society, and, according to surveys, are more likely than other generations to make buying decisions based in part on a company’s values.
Resources for Further Study
Friedman, Thomas L., “Thank You for Being Late: An Optimist’s Guide To Thriving In The Age Of Accelerations,” Farrar, Straus and Giroux, 2016. The New York Times foreign affairs columnist proposes socially responsible ways for both CEOs and individuals to navigate the tectonic changes resulting from the convergence of climate change, globalization and advances in technology.
Walker-Said, Charlotte and John D. Kelly, eds., “Corporate Social Responsibility?: Human Rights in the New Global Economy,” University of Chicago Press, 2015. Walker-Said, an Africa specialist at John Jay College of Criminal Justice, and Kelly, an anthropology professor at the University of Chicago, explain how CSR functions within different disciplines, such as business, law, the social sciences, and human rights.
Birch, Simon, “How activism forced Nike to change its ethical game,” The Guardian, July 6, 2012, http://tinyurl.com/
Coleman, Edda Collins, “Why global corporations should embrace corporate social responsibility,” The Hill, May 4, 2015, http://tinyurl.com/
Davis, Gerald F., “How corporate CEOs found their political voice,” The Conversation, Aug. 30, 2017, http://tinyurl.com/
Davis, Gerald F., and Christopher J., White, “The New Face of Corporate Activism,” Stanford Social Innovation Review, Fall 2015, http://tinyurl.com/
Fuhrmans, Vanessa, Joann S. Lublin and Emily Glazer, “Trump and the CEOs: Behind the Collapse of an Uneasy Alliance,” The Wall Street Journal, Aug. 20, 2017, http://tinyurl.com/
Greenhouse, Steven, “Anti-Sweatshop Movement is Achieving Gains Overseas,” The New York Times, Jan. 26, 2000, http://tinyurl.com/
Jarret, Valerie, “Business Leaders Support President Obama’s Plan to Reduce Carbon Pollution,” obamawhitehouse.archives.gov, June 27, 2013, http://tinyurl.com/
Nisen, Max, “How Nike Solved Its Sweatshop Problem,” Business Insider, May 9, 2013, http://tinyurl.com/
Sorkin, Andrew Ross, “Can Good Corporate Citizenship Be Measured?” The New York Times, June 26, 2017, http://tinyurl.com/
Strom, Stephanie, “To Be Good Citizens, Report Says, Companies Should Just Focus on Bottom Line,” The New York Times, June 14, 2011, http://tinyurl.com/
Waggoner, John, “Seeing green, asset managers ramp up purchases of ESG shops,” Investment News, Nov. 3, 2016, http://tinyurl.com/
Reports and Studies
Davis, Gerald F., Marina von Neumann Whitman and Mayer N. Zald, “Political Agency and the Responsibility Paradox: Multinationals and Corporate Social Responsibility,” International Policy Center, Gerald R. Ford School of Public Policy, University of Michigan, Oct. 7, 2010, http://tinyurl.com/
Eccles, Robert G., Ioannis Ioannou and George Serafeim, “The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance,” Harvard Business School, May 9, 2012, http://tinyurl.com/
McWilliams, Abagail and Donald Siegel, “Corporate social responsibility and financial performance: Correlation or misspecification?” Strategic Management Journal, May 2000, http://tinyurl.com/
Porter, Michael E. and Mark R. Kramer, “Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility,” Harvard Business Review, Dec. 2006, http://tinyurl.com/
The Next Step
Branding and Reputation
Crowl, Jonathan, “Are Ethical Branding Campaigns Causing Consumer Fatigue?” Content Standard, July 28, 2017, https://tinyurl.com/
Giammona, Craig, “Kraft Heinz Expands Sustainability Push After Unilever Bid,” Bloomberg, March 21, 2017, https://tinyurl.com/
Hobbs, Thomas, “The Body Shop on how its new owners are trying to revive its ‘activist spirit,’” Marketing Week, Sept. 20, 2017, https://tinyurl.com/
Taylor, Alison, “How to build the 5 levels of ethical company culture,” Green Biz, April 20, 2017, https://tinyurl.com/
Xu, Kevin, “Got a Do-Gooder Gene? 3 Tips for Launching a Successful CSR Initiative,” Entrepreneur, Sept. 13, 2017, https://tinyurl.com/
Yohn, Denise Lee, “New Generation Of Tech CEOs At Uber, Microsoft And Google Lead With Culture,” Forbes, Nov. 15, 2017, https://tinyurl.com/
Covello, Lauren, “Nike, Patagonia Win Awards at Davos for Efforts to Combat Waste,” Fortune, Jan. 17, 2017, https://tinyurl.com/
Eckhouse, Brian, “Biggest U.S. Companies Setting More Renewable-Energy Targets,” Bloomberg, April 25, 2017, https://tinyurl.com/
Toor, Amar, “Apple, Google, Microsoft, and Amazon will continue to fight climate change despite Trump’s order,” The Verge, March 31, 2017, https://tinyurl.com/
Alton, Larry, “How Millennials Are Reshaping What’s Important In Corporate Culture,” Forbes, June 20, 2017, https://tinyurl.com/
Biro, Meghan M., “Be the Change: Promoting Corporate Social Responsibility,” The Huffington Post, Feb. 27, 2017, https://tinyurl.com/
Peretz, Marissa, “Want To Engage Millennials? Try Corporate Social Responsibility,” Forbes, Sept. 27, 2017, https://tinyurl.com/
Boston College Center for Corporate Citizenship
Carroll School of Management, 140 Commonwealth Ave., Chestnut Hill, MA 02467
This organization provides research, executive education and networking forums to further CSR skills for its members. Membership is restricted to nonprofits and some government organizations and credit unions with corporate citizenship or sustainability departments.
Businesses for Social Responsibility
5 Union Square West, 6th Floor, New York, NY 10003
This international organization offers companies a range of programs on corporate social responsibility issues related to ethics, the workplace, the marketplace, the community, the environment and the global economy.
Committee for Economic Development
1530 Wilson Blvd., Suite 400, Arlington, VA 22209
With members representing a cross-section of U.S. corporations, this organization conducts policy research on the country’s fiscal health, education, global competitiveness and democratic institutions. It encourages U.S. business leaders to speak out on timely policy issues.
Corporate Responsibility Association
136 West St., Suite 104, Northampton, MA 01060
An organization offering training, webinars, and conferences for corporate officials charged with implementing sustainability policies and dealing with the media if something goes awry. The organization publishes Corporate Responsibility magazine, which compiles an annual list of the 100 most socially responsible U.S. companies.
Institute for Supply Management
309 West Elliot Rd., Suite 113, Tempe, AZ 85284-1556
This school trains supply chain professionals in sustainable and socially responsible procedures. In additional to accredited courses, it maintains a website that provides research, articles, training, audits and assessments, business case materials and indices on how companies and their suppliers can integrate sustainable and socially responsible strategies and practices into their business and supply chains.
Responsible Business Alliance
1737 King St., Suite 330, Alexandria, VA 22314
A group that works to create industry-wide social, environmental and ethical standards for the electronics industry supply chain. It partners with several auditing firms that monitor compliance with environmental and labor standards in factories and mines in 110 countries.
Social Venture Network
P.O. Box 29221, San Francisco, CA 94129-0221
This membership organization provides support to businesses that use “the triple bottom line,” an accounting framework that measures a company’s impact on profits, the people in its community and its surrounding environment.
United Nations Global Compact
685 3rd Ave., 12th Floor, New York, NY 10017
The world’s largest corporate social responsibility initiative. To date, 9,727 companies in 162 countries have signed on since it was initiated in 2000. The compact commits participating companies to a 10-point code of conduct regarding their labor, environmental, human rights and clean governance practices.