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CSR: Just Good Business

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Is CSR a real trend or just a fad?

  • It's a very real thing on which companies will increasingly focus.

    Votes: 3 30.0%

  • It's just gimmicky fluff and will go away like with the next fad.

    Votes: 4 40.0%

  • I couldn't care less.

    Votes: 3 30.0%

  • What? How dare you? CSI is the greatest.show.ever ...

    Votes: 0 0.0%
  • Total voters
    10
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Albert Gore said:
Shouldn't you be someplace else proferring information regarding the effect of dairy products on your daily bowel movement? :roll1:
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profer?

didn't you read the article on CSR, AJ? hookers don't wear fur coats any more... :shake:

well, most don't, anyway...

whitney-houston-scary-fur-auction.jpg
 
Upvote 0
ahem... wadc sez let's get back on topic. :biggrin:

another CSR piece from this week's issue:

The Economist: Ethical Capitalism, How good should your business be?


Ethical capitalism

[FONT=verdana, geneva, arial, sans serif][SIZE=+1]How good should your business be?[/SIZE][/FONT]

[SIZE=-2][FONT=verdana,geneva,arial,sans serif]Jan 17th 2008 [/FONT][/SIZE]

[FONT=verdana,geneva,arial,sans serif][SIZE=-1]Corporate social responsibility has great momentum. All the more reason to be aware of its limits [/SIZE][/FONT]

[FONT=verdana,geneva,arial,sans serif][SIZE=-1]HOW wonderful to think that you can make money and save the planet at the same time. ?Doing well by doing good? has become a popular business mantra: the phrase conjures up a Panglossian best-of-all-possible-worlds, the idea that firms can be successful by acting in the broader interests of society as a whole even while they satisfy the narrow interests of shareholders. The noble sentiment will no doubt echo around the Swiss Alps next week as chief executives hobnob with political leaders at the World Economic Forum in Davos.[/SIZE][/FONT]

[FONT=verdana,geneva,arial,sans serif][SIZE=-1]For these are high times for what is clunkingly called corporate social responsibility ([SIZE=-1]CSR[/SIZE]). No longer is it enough for annual reports to have a philanthropic paragraph about the charity committee; now companies put out long tracts full of claims about their fair trading and carbon neutralising. One huge push for [SIZE=-1]CSR[/SIZE] has come from climate change: ?sustainability? is its most dynamic branch. Another has been the internet, which helps activists scrutinise corporate behaviour around the globe. But the biggest force is the presumption that a modern business needs to be, or at least appear to be, ?good? to hang on to customers and recruit clever young people. [/SIZE][/FONT]

[FONT=verdana,geneva,arial,sans serif][SIZE=-1]Thus for most managers the only real question about [SIZE=-1]CSR[/SIZE] is how to do it. Our special report this week looks at their uneven progress in that regard. But it is also worth repeating a more fundamental question this paper has asked before: is the [SIZE=-1]CSR[/SIZE] craze a good thing for business and for society as a whole? [/SIZE][/FONT]

[FONT=verdana,geneva,arial,sans serif][SIZE=-1]Begin with business, where the picture is mixed. Much good corporate citizenship is a smug form of public relations. Public relations is part of business. A bad name has seldom been more expensive, especially when there is a war for talent and customers can look at your supply chain in Vietnam on YouTube. Public companies, remember, are creations of the state. In return for the privilege of limited liability, society has always demanded vaguely good behaviour from them. The cost of this implicit social franchise, whether shareholders like it or not, has risen. Companies as varied as Nike in clothing, GlaxoSmithKline in pharmaceuticals and Wal-Mart in retailing have had to change their ways quickly to avoid consumer or regulatory backlashes. [/SIZE][/FONT]

cont'd..
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WSJ: Does Being Ethical Pay?

Interesting study on whether / how much of a premium consumers are willing to pay for "products made with higher ethical standards"...

Does Being Ethical Pay?

May 12, 2008

By REMI TRUDEL AND JUNE COTTE

For corporations, social responsibility has become a big business. Companies spend billions of dollars doing good works -- everything from boosting diversity in their ranks to developing eco-friendly technology -- and then trumpeting those efforts to the public.

But does it pay off?

Many companies hope consumers will pay a premium for products made with higher ethical standards. But most companies plunge in without testing that assumption or some other crucial questions. Will buyers actually reward good corporate behavior by paying more for products -- and will they punish irresponsible behavior by paying less? If so, how much? And just how far does a company really need to go to win people over?

To find out, we conducted a series of experiments. We showed consumers the same products -- coffee and T-shirts -- but told one group the items had been made using high ethical standards and another group that low standards had been used. A control group got no information.

In all of our tests, consumers were willing to pay a slight premium for the ethically made goods. But they went much further in the other direction: They would buy unethically made products only at a steep discount.

What's more, consumer attitudes played a big part in shaping those results. People with high standards for corporate behavior rewarded the ethical companies with bigger premiums and punished the unethical ones with bigger discounts.

Finally, we discovered that companies don't necessarily need to go all-out with social responsibility to win over consumers. If a company invests in even a small degree of ethical production, buyers will reward it just as much as a company that goes much further in its efforts.

Below, we'll look at these tests in more detail. But first, a definition -- and a caveat.

For our purposes, "ethically produced" goods are those manufactured under three conditions. First, the company is considered to have progressive stakeholder relations, such as a commitment to diversity in hiring and consumer safety. Second, it must follow progressive environmental practices, such as using eco-friendly technology. Finally, it must be seen to demonstrate respect for human rights -- no child labor or forced labor in overseas factories, for instance.

GOOD BUSINESS?
? The Question: Companies spend billions of dollars doing good works -- such as developing eco-friendly technology -- and then trumpeting them to the public. But does it pay off?
? The Test: In a series of experiments, consumers were shown the same products -- coffee and T-shirts -- but one group was told the items had been made using high ethical standards and another group that low standards had been used.
? The Result: Consumers are willing to pay a small premium for ethically produced goods. But they'll punish an unethically made product even more harshly, by buying it only at a steep discount.

Now the warning, which may not come as much of a surprise. Even though we think ethical production can lead to higher sales, not all consumers will be won over by the efforts. Some may prefer a lower price even if they know a product is made unethically.

With that in mind, here's a closer look at our results.

[...]

REWARD AND PUNISHMENT
What consumers were willing to pay for a pound of coffee based on what they were told about the company's production standards

Ethical standards . . . . . . . . $9.71
Unethical standards . . . . . . . . 5.89
Control (no information) . . . . . 8.31
Source: Remi Trudel and June Cotte


A MATTER OF DEGREE
How much consumers were willing to pay for all-cotton T-shirts based on what they were told about the proportion of ethical production

100% organic cotton . . . . . . . $21.21
50% organic cotton . . . . . . . . 20.44
25% organic cotton . . . . . . . . 20.72
Unethical behavior* . . . . . . . 17.33
Control (no information) . . . . 20.04
*Production harms environment


ATTITUDE ADJUSTMENT
Consumers with high ethical expectations of companies doled out bigger rewards and punishments than consumers with low expectations. What each group was willing to pay for a pound of coffee based on production standards:

Consumers with high expectations:
Ethical standards . . . . . . . $11.59
Unethical standards . . . . . . . 6.92
Consumers with low expectations:
Ethical standards . . . . . . . $9.90
Unethical standards . . . . . . . 8.44

cont'd...
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Upvote 0
Maybe it would help if your business caters to the Whole Foods, Prius, New Balance, Sig water bottle crowd.

A purpose of a business is to make money not be socially responsible. If consumers feel social responsibility is a worthwhile pursuit they'll direct their money to those businesses.
 
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