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CSR Branding Survey 2010

The second annual Corporate Social Responsibility Perceptions Survey, conducted by research-based consultancy Penn Schoen Berland in partnership with brand consulting firm Landor Associates and strategic communications firm Burson-Marsteller, analyzed consumer views of companies operating across 14 industries ranging from Apparel to Telecommunications.

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CORPORATE SOCIAL RESPONSIBILITY
       BRANDING SURVEY

                                                 2010

In conjunction with:




NEW YORK • WASHINGTON • DENVER • SEATTLE • LOS ANGELES • SAN FRANCISCO • AUSTIN• LONDON • HONG KONG • BEIJING • DUBAI

©PENN, SCHOEN & BERLAND ASSOCIATES, LLC.
KEY FINDINGS
   1.     Social responsibility remains important to consumers despite the recession.
             •    More than 75% of consumers say that responsibility is important for each tested industry.


   2.     Social responsibility remains a differentiator for products and brands.
             •    55% are more likely to choose a product that supports a certain cause when choosing between otherwise similar
                  products.


   3.     Some industries have taken a hit in terms of consumer perception of their
          responsibility in the last year.
             •    Consumer perceptions of the Healthcare industry have dropped most significantly – perhaps because of added scrutiny
                  of congressional debate – though CSR experts often rank healthcare companies as performing well.


   4.     Some consumers are willing to pay more for products with added social benefits,
          despite the recession.
             •    38% of respondents still plan to spend the same or more on products or services from socially responsible companies,
                  compared to 2009.


   5.     Communications about social responsibility have significant impact on
          favorability and purchase intent, though they don’t consistently break through.
             •    75% of those who have read about a company’s social responsibility agenda on its website say it made them more likely
                  to purchase products or services from the company in the future – but just 13% of all respondents have done so.




Penn Schoen Berland, in conjunction with Burson-Marsteller and Landor, conducted 1001 online interviews with the general public in the
U.S. (ages 18+) from February 10-12, 2010. Overall, the margin of error is +/- 2.53%, and greater for subgroups. All numbers shown in
percentages unless otherwise noted.                                                                                                   1
SLIGHTLY MORE THAN HALF OF CONSUMERS ARE
                     UNSURE ABOUT THE MEANING OF CSR

           Fewer than one-half (45%) of respondents say they know the meaning of the
                            term “Corporate Social Responsibility.”




                                               Percent Who Know Meaning of “CSR”




                                                                                       2
Q: Do you know what the term “corporate social responsibility” means?
GIVING BACK TO THE COMMUNITY AND SELF-REGULATION
                  ARE TOP PILLARS OF CSR
          Of those who do know what “CSR” means, 20% say it means giving back to the
            local community and 19% say it is about self-regulation and accountability.


                                                      Definition of CSR




                                                                                          3
Q IF KNOWS WHAT CSR MEANS: What does it mean? N=451
THERE IS LOW AWARENESS OF CORPORATE COMMUNICATIONS
                     ABOUT SOCIAL RESPONSIBILITY

                          Only 11% say they’ve heard communications about CSR
                                    from any company in the past year.

                                                               Percent Who Heard CSR
                                                             Messages from Any Company




                                                                                                          4
Q: During the past year, did any company(s) communicate with you about corporate social responsibility?
TREATING THE ENVIRONMENT AND EMPLOYEES WELL ARE THE
                  TOP WAYS TO BE SOCIALLY RESPONSIBLE

       Environmental (16%) and employment (16%) practices are the leading ways
                  for firms to be perceived as socially responsible.


                                         What Companies Should Do to Be Socially Responsible




                                                                                                                                                  5

Q IF KNOWS WHAT CSR MEANS: As far as you know, what do you think companies should be doing today to be considered “socially responsible”? n=451

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CSR Branding Survey 2010

  • 1. CORPORATE SOCIAL RESPONSIBILITY BRANDING SURVEY 2010 In conjunction with: NEW YORK • WASHINGTON • DENVER • SEATTLE • LOS ANGELES • SAN FRANCISCO • AUSTIN• LONDON • HONG KONG • BEIJING • DUBAI ©PENN, SCHOEN & BERLAND ASSOCIATES, LLC.
  • 2. KEY FINDINGS 1. Social responsibility remains important to consumers despite the recession. • More than 75% of consumers say that responsibility is important for each tested industry. 2. Social responsibility remains a differentiator for products and brands. • 55% are more likely to choose a product that supports a certain cause when choosing between otherwise similar products. 3. Some industries have taken a hit in terms of consumer perception of their responsibility in the last year. • Consumer perceptions of the Healthcare industry have dropped most significantly – perhaps because of added scrutiny of congressional debate – though CSR experts often rank healthcare companies as performing well. 4. Some consumers are willing to pay more for products with added social benefits, despite the recession. • 38% of respondents still plan to spend the same or more on products or services from socially responsible companies, compared to 2009. 5. Communications about social responsibility have significant impact on favorability and purchase intent, though they don’t consistently break through. • 75% of those who have read about a company’s social responsibility agenda on its website say it made them more likely to purchase products or services from the company in the future – but just 13% of all respondents have done so. Penn Schoen Berland, in conjunction with Burson-Marsteller and Landor, conducted 1001 online interviews with the general public in the U.S. (ages 18+) from February 10-12, 2010. Overall, the margin of error is +/- 2.53%, and greater for subgroups. All numbers shown in percentages unless otherwise noted. 1
  • 3. SLIGHTLY MORE THAN HALF OF CONSUMERS ARE UNSURE ABOUT THE MEANING OF CSR Fewer than one-half (45%) of respondents say they know the meaning of the term “Corporate Social Responsibility.” Percent Who Know Meaning of “CSR” 2 Q: Do you know what the term “corporate social responsibility” means?
  • 4. GIVING BACK TO THE COMMUNITY AND SELF-REGULATION ARE TOP PILLARS OF CSR Of those who do know what “CSR” means, 20% say it means giving back to the local community and 19% say it is about self-regulation and accountability. Definition of CSR 3 Q IF KNOWS WHAT CSR MEANS: What does it mean? N=451
  • 5. THERE IS LOW AWARENESS OF CORPORATE COMMUNICATIONS ABOUT SOCIAL RESPONSIBILITY Only 11% say they’ve heard communications about CSR from any company in the past year. Percent Who Heard CSR Messages from Any Company 4 Q: During the past year, did any company(s) communicate with you about corporate social responsibility?
  • 6. TREATING THE ENVIRONMENT AND EMPLOYEES WELL ARE THE TOP WAYS TO BE SOCIALLY RESPONSIBLE Environmental (16%) and employment (16%) practices are the leading ways for firms to be perceived as socially responsible. What Companies Should Do to Be Socially Responsible 5 Q IF KNOWS WHAT CSR MEANS: As far as you know, what do you think companies should be doing today to be considered “socially responsible”? n=451
  • 7. SOME OF THE INDUSTRIES WHERE CSR IS MOST IMPORTANT PERFORM WORST While consumers say CSR is very important for healthcare (88%), automotive (85%) and financial service (85%) companies, these industries scored poorly on their CSR performance (35%, 38% and 27% respectively). Importance of CSR to Positive CSR Industry Industry Performance 2010 2010 Healthcare 88% 35% Energy 88% 44% Food 88% 62% Automotive 85% 38% Financial Services 85% 27% Consumer Goods 84% 58% Media 83% 37% Retailers 82% 54% Technology - Electronics 81% 57% Technology - Computer Hardware & Software 81% 57% Beverages 80% 60% Technology - Online Services 79% 54% Telecom Services 77% 40% Apparel 77% 52% 6 Q: How important is it for companies in this industry to be socially responsible? Q In the last five years, how well have each of the following industries performed in being socially responsible?
  • 8. CONSUMERS BELIEVE CSR IS MORE IMPORTANT FOR SOME INDUSTRIES THAN FOR OTHERS Industries where CSR is Industries where CSR is Less Important but that Important and that have have Performed Well Performed Well Food Beverages Technology - Computer Consumer Goods Hardware & Software/ Technology - Electronics Technology – Retailers Online Services Apparel Has Performed Well (Very + Somewhat well) Energy Telecom Services Media Automotive Healthcare Financial Services Industries where CSR is Industries where CSR is Less Important that Important that have have Performed Poorly Importance Performed Poorly (Very + Somewhat Important) CONFIDENTIAL 7
  • 9. MANY CONSUMERS ARE COMMITTED TO SPENDING MORE ON SOCIALLY RESPONSIBLE PRODUCTS IN THE COMING YEAR Fifty-nine percent plan to spend the same or more on products from socially responsible companies in the coming year. Change in Spend on Products From Socially Responsible Companies Within Next Year Q: In the next year, do you plan to spend more, less or the same amount on products and services from socially responsible companies? 8
  • 10. CONSUMERS ARE WILLING TO PAY A PREMIUM FOR GOODS FROM SOCIALLY RESPONSIBLE COMPANIES 70% are willing to pay a premium on $100-products from a socially responsible company. Additional Amount Willing to Pay for a $100 Socially Responsible Product 70% are willing to pay more. 28% are willing to pay at least $10 more. 9 Q: Thinking broadly, how much more would you be willing to spend on a $100 product if you could purchase a version from a socially responsible company? Specify in whole US dollars.
  • 11. CONSUMERS ARE MUCH MORE LIKELY TO PURCHASE PRODUCTS WITH “ADDED SOCIAL BENEFIT” A majority of consumers say they are more likely to purchase products that support a certain cause when given the choice to do so. Influence of “Added Social Benefit” on Purchase Decisions More likely to purchase Less likely to purchase product with added social product with added social benefit benefit = I would be indifferent between the products. CONFIDENTIAL 10 Q: If confronted with a choice between similar products, which best describes your likely purchase decision?
  • 12. MORE THAN TWO-THIRDS OF CONSUMERS SAY THEY WILL MAKE SOME CHANGES IN BEHAVIOR FOR SOCIAL RESPONSIBILITY CSR Attitude Definition Will Pay More? Will Cut Salary* Seeker Willing to make Moderate to Extreme changes in both spending and salary Yes a lot, $11-76+ Yes a lot, 11-21+% Opportunistic Willing to make Moderate to Extreme cuts in salary or spend more, but not both Either $0-76 Or 0-21% Minimalist Willing to make Minimal changes in spending, salary or both Yes a little, $0-10 Yes a little, 0-5% Non-CSR No change in spending and salary No No Q: Thinking broadly, how much more would you be willing to spend on a $100 product if you could purchase a version from a socially responsible company? Please specify in whole US dollars. Q: What percentage of your salary would you be willing to give up in exchange for working with a company that is well-known for being socially responsible? *n=883
  • 13. ALMOST 8 IN 10 EMPLOYEES ARE UNCLEAR OR UNAWARE OF THEIR EMPLOYERS’ CSR ACTIVITIES Only 22% are aware that their companies have CSR practices. The majority either say “no” (25%) or “don’t know” (53%), for a total of 78%. Percent Whose Workplaces Employ CSR Practices Q Does your workplace employ any corporate responsibility practices? 12
  • 14. EMPLOYEES ARE MOST AWARE OF THEIR COMPANIES’ ENVIRONMENTAL AND CHARITABLE CSR ACTIVITIES Employees are primarily aware of their employers’ environmental (33%) and charitable (24%) activities. CSR Activities Deployed by Companies 13 Q IF COMPANY HAS CSR PRACTICES: What corporate social responsibility practices has your company deployed? N=221
  • 15. ONE-THIRD OF WORKERS WOULD TAKE A PAY CUT TO WORK FOR A SOCIALLY RESPONSIBLE FIRM Proportion of Salary Employees Would Relinquish to Work at Socially Responsible Firm 34% would take a pay cut. 14 Q: What percentage of your salary would you be willing to give up in exchange for working with a company that is well-known for being socially responsible?
  • 16. YOUNGER WORKERS ARE MORE LIKELY TO TAKE PAY CUT TO WORK FOR A SOCIALLY RESPONSIBLE FIRM About one-half (49%) of 18-24 year old employees would take a pay cut to work at a socially responsible firm compared with 33% of 35-39 year olds and 25% of employees age 65+. Proportion of Employees Who Would Take a Pay Cut to Work at Socially Responsible Firm 15 Q: What percentage of your salary would you be willing to give up in exchange for working with a company that is well-known for being socially responsible?
  • 17. FEW CONSUMERS ARE READING CSR CONTENT ON CORPORATE WEBSITES Only 13% have read about a company’s CSR agenda on the corporate website. Percent Who Have Read a Company’s CSR Agenda on Their Website CONFIDENTIAL 16 Q: Have you ever read about a company’s social responsibility agenda on their website?
  • 18. READING ABOUT CSR ON THE CORPORATE WEBSITE DRIVES PURCHASES While few have read about a company’s CSR agenda on their website, three- quarters of those who have are either much (26%) or somewhat (49%) more likely to purchase a product from that company. Percent Who Have Read a Company’s CSR Agenda on Their Website Q: IF READ: What impact would you say that reading the social responsibility agenda of that company(s) has had on your likelihood to purchase their products 17 CONFIDENTIAL or services in the future, if any? N=129
  • 19. IMPLICATIONS OF FINDINGS 1. Consumers are paying attention to social responsibility. • Companies in industries perceived as lacking on these issues have an opportunity to differentiate themselves. 2. Tying social responsibility to products is key. • Consumers are more likely to select the product with an added social benefit when given a choice between otherwise similar products. 3. Communications are important, and companies need to understand which social responsibility messages will resonate with consumers. • To be perceived as socially responsible, companies need to offer high-quality products at good prices, while communicating to consumers about the ways they respect and give back to their employees, their communities, and the environment. 18
  • 20. MORE ABOUT CORPORATE SOCIAL RESPONSIBILITY For more information about this survey and our Corporate Citizenship practices, please contact: ERIC BIEL BETH LESTER SCOTT OSMAN MANAGING DIRECTOR VICE PRESIDENT GLOBAL DIRECTOR Eric.Biel@bm.com blester@ps-b.com Scott.Osman@landor.com 202.530.4559 202.962.3042 212.614.5137 19