Corporates’ CSR Expenditures ‘Show Little Effect on Attitudes’

Many of the world’s 100 most reputable companies have little to show for the millions of dollars they spend on corporate social responsibility (CSR) initiatives, according to a study by the London-based consultancy Reputation Institute.

Its publication, entitled ‘2012 CSR RepTrak 100 Study’, reports that 60% of 47,000 respondents across 15 markets were unsure whether companies ‘are good corporate citizens that support good causes and protect the environment’, while 4% believed that companies could ‘absolutely not be trusted’.

“For companies to win in the reputation economy, they need customers and stakeholders to trust and support them. CSR is a major driver of trust and reputation. So CSR is not dead,” said Kasper Nielsen, executive partner of Reputation Institute. “But with 50-60% of consumers unsure if the largest companies in the world are good corporate citizens, open and transparent and are good places to work, it is clear that CSR investments are being mismanaged.”

The study indicates that companies that make reputation management and hence, CSR, a driving force in their business strategy realize result; a  five point increase in a CSR rating would result in a 9.1% rise in the numberof people who would definitely recommend a company. It adds that there is real money in improving reputation through CSR, but companies are failing to leverage this.

“Companies are mismanaging their CSR investments…it’s that simple,” said Nielsen. “They are not applying the same rigor to these investments as they do to their other core business priorities. They are not linking CSR to their business strategy but instead, treating it as a separate initiative and investment. You don’t do CSR for the sake of CSR. You do CSR as part of your reputation management strategy to drive business growth, customer loyalty, and employee alignment.”

Microsoft has the best reputation for CSR in the world according to the study. It is the company in the world that is seen as delivering best on citizenship, workplace and governance. Microsoft is joined in the top 10 by Google, The Walt Disney Company, BMW, Apple, Daimler, VW, Sony, Lego, and Colgate-Palmolive.

Overall, Microsoft was placed first in terms of governance and second in both workplace and citizenship behind Google and Walt Disney Company respectively. Of the 100 companies evaluated, only 22 were considered ethically strong, with the remaining 78 deemed average in terms of transparency and openness.

Other trends noted in the survey were as follows:

  • Only 6% of respondents perceive the Top 100 companies as good corporate citizens.
  • Only 17% of respondents definitely trust what companies promise in their advertising and marketing.
  • Only 19% of respondents trust what companies say in official reports.
  • Fifty-four percent of respondents definitely agree that Microsoft is a responsibly-run company earning it the top spot for governance.
  • The Walt Disney Company wins citizenship, with 50% of respondents definitely agreeing that the company is a good corporate citizen.
  • Google takes first place in workplace, with 50% of respondents definitely agreeing that Google is an appealing place to work and that it treats its employees well.
  • No company has a top CSR perception across all 15 markets, proving the difficulties companies have in exporting their reputation.

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