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Corporate Social Responsibility

Corporate Social Responsibility

How Local Events Affect Corporate Philanthropy


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By Melissa J. Anderson

In an age of rapid globalization, it’s easy to shift focus from a local to a more macro view. But a new working paper out of Harvard University and the University of Toronto sets out to underscore the importance or retaining that community spotlight – even when dealing with large, Fortune 1000 companies.

The researchers, András Tilcsik, University of Toronto and Christopher Marquis, Harvard University, tracked the corporate philanthropy activity of various companies leading up to, during, and after major community events to find out how punctuating events in communities affected corporate decision-making.

According to Tilcsik and Marquis, large, planned mega-events like the Olympics had the biggest positive impact on corporate giving – before, during and after. Small-scale natural disasters also led to an uptick in local corporate giving. But large-scale natural disasters like Hurricane Katrina had a negative effect on corporate giving.

The authors say that the project is important because it reminds us of the influence that local events can have on institutional relations. They write, “…this paper speaks not only to the organizational literature on communities and institutions but also to a broader literature on place—a physical, geographic location that is invested with meaning and value.”

Corporate Social Responsibility

Executives See Link Between CSR and Profitability


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By Melissa J. Anderson

According to a new study published by Adam Friedman Associates, corporate executives are likely to believe there is a link between Corporate Social Responsibility and profit.

The authors of the paper, Julia Bonner, NYU, and Adam Friedman, NYU and Adam Friedman Associates, believe that this represents a shift in how CSR has been viewed over time. They write, “A significant finding clearly is the strong link between CSR and profitability within many corporations. While CSR may have initially been perceived as a ‘soft’ discipline within the corporate structure, today it has evolved into a policy that directly affects profitability.”

The study also showed that CSR decisions are usually made by top level executives in the C-Suite or Board of Directors, with the input of other groups – such as legal and PR. Additionally, they suggest, in the future, CSR departments may become obsolete as a CSR philosophy is simply subsumed by the organization.

Corporate Social Responsibility

Steps for Building a Unified CSR Strategy


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By Melissa J. Anderson

Recently Harvard Business School researchers released a working paper detailing how companies can more effectively organize their various CSR initiatives into a cohesive strategy.

Based on their own experience and a poll of polled 50 CSR managers, the researchers Kash Rangan, Lisa A. Chase, and Sohel Karim, surmised that most CSR activities fall into three categories – philanthropy, strategic CSR (supply chain enriching), and re-engineering the business. But, they continue, oversight of each of these programs is disorganized and unfocused when it comes to business goals. Individuals with the responsibility of carrying them out, often do not have the authority to accomplish the task.

Rangan, Chase, and Karim suggest a process to connect the dots between individual disparate programs in a way that will tie with short and long term business strategy.

Corporate Social Responsibility

CR Careers Lack Defined Path


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By Melissa J. Anderson

According to new research by the US Chamber of Commerce, currently careers in corporate responsibility don’t follow a deliberate or defined path – that is, individuals with top jobs in the field often come from other business functions.

The field would benefit from a more defined educational and career track, say two senior individuals in the field, Ann Cramer, Director, Corporate Citizenship and Corporate Affairs at IBM and Chair, U.S. Chamber BCLC Business and Society relations Committee and Richard Crespin Executive Director, CROA. They write, “We need to work together to create the educational programs, career paths, and leaders that will fulfill on CR’s promise to maximize the positive impact of business while minimizing or eliminating the negative.”

Cramer and Crespin add, “Improving corporate citizenship will take the deliberate work of not just our organizations but also of individuals like you who are willing to take risks and take action. Armed with data we hope you will join us in this important work.”

Corporate Social Responsibility

A Sustainability Culture Means Better Corporate Performance


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By Melissa J. Anderson

Does corporate sustainability really pay out in the long run? According to a Harvard Business School working paper, companies that have engaged in sustainability initiatives for a long time “exhibit fundamentally different characteristics from a matched sample of firms that adopted almost none of these policies,” including better performance on sustainability measures – and better performance in the stock market.

The companies engaging in long-term sustainability practices are described as having a “culture of sustainability,” that is board directors, senior management, and the rest of the workforce are all engaged in driving sustainability.

According to the paper, The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance, “high sustainability” companies perform better than those companies that have only engaged in sustainability for a short time or for appearances. The researchers, Robert G. Eccles, Ioannis Ioannou, George Serafeim, explain:

“High Sustainability companies significantly outperform their counterparts over the long-term, both in terms of stock market and accounting performance. The outperformance is stronger in sectors where the customers are individual consumers instead of companies, companies compete on the basis of brands and reputations, and products significantly depend upon extracting large amounts of natural resources.”

Much opposition to corporate sustainability revolves around cost pressure, but, the study shows, that opposition doesn’t make sense – companies engaging in CSR on a cultural level are better off in the long run.

Corporate Social Responsibility

Corporate Sustainability Being Taken More Seriously


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By Melissa J. Anderson

According to a new study by KPMG, more and more companies are engaging in sustainability reporting than ever before – because of the realization that it makes good business sense.

The 2011 KPMG International Survey of Corporate Responsibility Reporting [PDF] says, “Companies are increasingly realizing that CR reporting is about more than just being a good corporate citizen; it drives innovation and promotes learning, which helps companies grow their business and increase their organization’s value.”

And, it says, those companies that have yet to begin reporting are running the risk of falling behind their competitors. The report continues:

“It seems clear, therefore, that companies not yet reporting on their CR activities are under significant pressure to start. This will be increasingly critical; not only to stay competitive in a societal context, but also to gain a better understanding of how CR activities impact and benefit the business in areas such as cost savings and new business opportunities.”

The firm analyzed the Corporate Responsibility reports of 3.400 companies around the world, including the 250 largest companies. It found that big companies were much more likely to report on sustainability than smaller ones. For example, 95% of the G250 companies now report on CR activities.

Corporate Social Responsibility

Corporate Volunteerism Rises among Top Companies


Strength in Numbers

By Melissa J. Anderson

Recently Forbes Insights released the results of its latest survey on corporate social responsibility. According to the report, “Corporate Philanthropy – The New Paradigm: Volunteerism. Competence. Results.” companies are relying to corporate responsibility more and more to position themselves for success in new markets and to build the competencies of high performing employees.

For example, the report details MasterCard’s recent partnership with the Grameen Foundation in Colombia, which involved an 8-month leadership program for a select group of talented employees.

Patricia Devereux, group head of Corporate Philanthropy & Citizenship at MasterCard Worldwide, explained, “Corporate social responsibility isn’t just about writing checks anymore; it’s making important ties with what is going on in your community.”

She continued, “The commitment from senior management is strong, our employees worldwide are increasing their volunteer hours, and all of us can see firsthand the impact we are having in our communities.”

Devereaux also discussed another trend revealed in the report – tracking progress and making changes based on that data to achieve results. “Those are long-term metrics, of course, but that’s what we are interested in – long-term, sustainable improvements,” she said.

Corporate Social Responsibility

Corporate Responsibility Roles Increase in Number and Responsibility


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By Melissa J. Anderson

According to the latest global Corporate Responsibility Best Practices survey, the number of global companies with a lead role overseeing CR increased to 62% last year, compared to 42% in 2010. The survey also revealed that 77% of companies plan to grow their corporate responsibility programs in the next three years.

The report, released by Corporate Responsibility Magazine, the Corporate Responsibility Officer Association and NYSE Euronext, is based on a poll of companies on NYSE Euronex Indices, plus other companies within the magazine’s database, reported Environmental Leader.

The study showed that companies are expanding CR programming and recognizing that it does have an impact on their market competitiveness and employee engagement levels. In fact, the study showed, even corporate leadership is working to drive the CR conversation within their companies.

Corporate Social Responsibility

Making Corporate Responsibility Really Work


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By Melissa J. Anderson

In a recent Harvard Business Review blog post, leadership expert Frances Hesselbein wrote about the critical importance of corporate responsibility – not just as a means to provide visibility to companies, but as a way to nourish deep pools of talent within the community. She wrote:

For leaders in all three sectors there is a new appreciation that when we build the healthy community, it is for the greater good. And even for a leader with little concern about the greater good, there is the reality that a sick and ailing community cannot produce the healthy, energetic, productive workforce our enterprises demand if indeed they are to be viable and even present at the end of this turbulent decade.

Hesselbein was writing in 2010, when, mired in a recession, companies were cutting the budgets of any corporate program that didn’t seem crucial in the short term. She cautioned against this, explaining that leadership had the ability to instill a dedication to corporate responsibility in a high-performing workplace culture.

She also said that the commitment to corporate responsibility must not be superficial, but rather a deep and earnest effort on behalf of the corporation. She writes:

“Ignoring externalities threatens excellence, ethics, and engagement in organizations, but addressing these externalities can transform challenges into opportunities. When we truly focus on the common good, service is a privilege —not a chore but a remarkable opportunity.”

A new study confirms that notion – and goes further. Not only must corporate leadership truly believe in its corporate responsibility efforts for them to have an impact on stakeholders, but the company has to be respected in the marketplace as a high value company as well.

Corporate Social Responsibility

Female Leaders Increase Corporate Philanthropy


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By Melissa J. Anderson

According to a recent study by Catalyst and Harvard Business School, companies with more female leaders may be considerably more socially responsible than those with without many women at the top.

The study’s authors, Rachel Soares, Senior Associate, Research, Catalyst; Christopher Marquis, Ph.D., Associate Professor, Harvard Business School; and Matthew Lee, Doctoral Candidate, Harvard Business School, say the study showed a connection between gender-inclusive leadership and corporate social responsibility.

Anabel Pérez, Senior Vice President, Development at Catalyst, commented, “Companies are realizing that advancing more women to senior leadership roles has many benefits, including increased financial performance and sustainability.”

She continued, “As this study shows, inclusive leadership has a positive influence on the quantity and quality of an organization’s CSR initiatives. When business leadership includes women, society wins.”

The study shows that Fortune 500 companies with more three or more women directors or 25% or more women corporate officers made considerably larger charitable donations than those with zero women directors or 0% women corporate officers, respectively.