Corporate Social Responsibility (CSR) and Sustainability - The facts you should know. A review of some of the ground breaking research conducted over the past couple of years. Looking at; public perceptions, business leaders views, consumer trends, investors opinions, employee engagement, graduates, risks and where's the value. www.4frontconsulting.com

1. Corporate Social Responsibility (CSR) – The Facts
You Should Know
November 2013

2. Contents
•
Introduction
•
CSR: What is it?
•
Public Perceptions of Companies CSR Activities
•
Business Leaders Views on CSR
o
Consumers: Interested but Conflicted
o
Investors: Growing Engagement
o
Accelerating Progress: Towards Transformation
•
Employees Opinions on CSR
•
Graduate Perceptions of CSR
•
Risk of Weak CSR
•
CSR: Where's the Value?
•
References

3. Introduction
•
Corporate Social Responsibility (CSR) has
come a long way in the last couple of
decades. From being on the periphery of
business strategy in the 80’s and 90’s to
now becoming an essential value
generating strategy for all forward looking
businesses.
•
Upwards of 85% of FTSE100 companies
now report on their CSR activities.
•
But how do we demonstrate the importance
and value of CSR today? This slide show
highlights some of the most recent facts
and figures in answer to this question.

4. Introduction; What is CSR?
Effective CSR is about business acknowledging the social and
environmental impacts of its operations and the related expectations of it’s
wider stakeholder groups; implementing strategies to deliver on these
expectations in a way that generates positive social and environmental
benefits whilst simultaneously delivering value (whether financial or
reputational) for the business itself.

5. Public Perceptions of CSR Activities
The general public and the media are increasingly focusing on the
social and environmental performance of companies. This focus can
have a direct impact on reputation, share price and ultimately sales.
•
83% of people will trust a company more if it is seen as being
socially and environmentally responsible;
•
68% of people agree that large companies should be actively
involved in solving social/environmental problems;
•
70% of people in UK believe companies and brands should play a
role in improving our quality of life and well-being.
D.Woods (2011)
Regardless of industry, companies not proactively focusing on
their social and environmental impacts are risking reputation and
as a result value

6. Business Leaders Views on CSR
A recent survey by the UN Global Compact and Accenture has
given a unique insight into business leaders‘ views on the
pathway towards a sustainable economy. The survey included
1,000 CEOs across 103 countries and 27 industries. Some of
the most notable results are highlighted on the following pages.

7. Business Leaders Views on CSR
•
Only 32% of CEOs believe that the global economy is on track to
meet the demands of a growing population;
•
Only 33% believe that business is making sufficient efforts to address
global sustainability challenges;
•
84% believe that business should lead efforts to define and deliver
sustainable development goals;
•
37% see the lack of a link to business value as a barrier to
accelerating progress.
P.Lacy and R.Hayward (2013)
Moving forwards leading businesses will continue to focus on CSR
as a core business strategy. Though there may currently be
questions over the link between business value and CSR, recent
research shows that companies committed to CSR generate on
average 18% higher profits than those without.

8. Consumers: Interested but conflicted
•
81% of CEOs believe that the CSR/Sustainability reputation of their
company is important in consumers' purchasing decisions;
•
64% of companies see the consumer as a key stakeholder in
influencing their approach to CSR/Sustainability;
•
46% believe that CSR/Sustainability issues will always be
secondary to traditional factors of price, quality and availability;
•
Only 28% report that to date they have secured a price premium
with consumers through their reputation on CSR/Sustainability.
P.Lacy and R.Hayward (2013)
Though to date though consumers may not necessarily willing to pay
a price premium, the importance that consumers are starting to
place on the CSR reputation of companies indicates that it is likely
only a matter of time before this becomes a key differentiator
between products of similar price, quality and availability.

9. Investors: Growing engagement
•
Only 12% of CEOs currently regard investor pressure as among their
chief motivators on CSR/Sustainability;
•
23% see investors as an important stakeholder in guiding their
approach;
•
31% believe that their company's share price currently includes value
directly attributable to CSR/Sustainability initiatives;
•
69% believe that investor interest will become an increasingly
important factor.
P.Lacy and R.Hayward (2013)
Though currently investors may not be heavily influential in terms of a
companies CSR practices, CEO’s are expecting this to increase in the
coming years, in particular as they become more educated about the
value CSR can generate for their investments, as well as risk
mitigation.

10. Accelerating Progress: Towards transformation
Leading companies are charting a path towards transformation and competitive
advantage but sound a warning to policy makers on the need to align market
incentives with sustainable development.
•
93% of CEOs see CSR/Sustainability as important to the future success of
their business;
•
78% see CSR/Sustainability as an opportunity for growth and innovation;
•
80% see these issues as a route to competitive advantage in their
industry;
•
83% of CEOs believe that governments should step up their efforts to
provide an enabling environment for business efforts on
CSR/Sustainability.
P.Lacy and R.Hayward (2013)
Implemented strategically CSR can deliver real sustainable value for
a business. Ultimately those company's not engaging will be left
behind.

11. Employees’ Opinions on CSR
•
Companies with more engaged employees perform better financially,
with productivity increasing on average by 18% and operating
margins up by 27%;
•
57% of employees want their company to do more in relation to CSR;
•
63% of employees believe that having time off during working hours
to commit to charitable causes would significantly increase employee
engagement;
•
49% of employees are more likely to stay with an employer that
encourages charitable giving;
GALLUP (2013) & D.Woods (2011)
Employee engagement is crucial to long-term
business success and productivity. An effective
CSR strategy incorporates this as a core focus of
its activities

12. Graduate Perceptions of CSR
•
80% of young professionals are interested in securing a job that
has a positive impact on the environment and society;
•
90% of young professionals would prefer to work for an
environmentally friendly employer;
•
50% of young professionals would turn away from an employer that
lacked good CSR policies.
D.Woods (2011)
Businesses that attract the best graduates have a competitive
advantage over their rivals. Ensuring your business is seen as
being an attractive place to work is an essential part of attracting
the brightest graduates.

13. Risks of weak CSR practices
Demonstration of strong CSR activities can generate significantly
positive reputational impacts for business. Similarly poor / weak CSR
practices can be extremely damaging to reputation.

14. CSR – Where’s the Value?
•
Investors, have in the past, been hesitant when investing in
CSR/Sustainability initiatives. This is predominantly due to a lack of
evidence proving that CSR/Sustainability strategies can have a
material effect on a company's reported financial performance.
•
There have recently however been new efforts to communicate the
value of sustainability. This communication has shown that these
strategies have the potential to drive revenue growth through
attracting like minded clients / customers, improve employee
productivity, reduce operational costs (through environmental
efficiencies) and measurably reduce key CSR-related risks to
revenue and reputation.
•
Companies with a public commitment to CSR on average perform
better on 3 out of 4 financial measures than those without. These
companies also have over 18% higher profits on average
Institute of Business Ethics

15. CSR – Where’s the Value?
•
Unilever - reduced its overall environmental footprint:
$395 million cost savings since 2008.
•
Marks & Spencer - Plan A: $296 million in combined
economic benefits since its inception in 2007.
•
Walmart - Packaging reduction: $200 million in initial
costs savings in 2009.
•
Intel - Energy reduction: $23 million in annual costs
savings since 2001.
•
Knight Frank – Estimate savings of £500 million /
year due to increased employee engagement

16. CSR – Where’s the Value?
•
Clorox - Green Works Product Line: 40% share of natural
cleaners market, $200 million annual revenue during
2008.
•
Pirelli - green performance products: 45% of 2012
revenue.
•
Philips - green products: 45% of $24 billion annual
revenue in 2012 (with goal of converting 100% of product
line).
•
GM - recycling & reusing manufacturing waste: $1 billion
annual revenue, 2012.
C.Krosinsky & D.Lubin (2013)

17. 4Front Consulting – What we do
• 4Front Consulting is a specialist CSR and Sustainability
consultancy.
• We work alongside companies to help them develop,
enhance and implement CSR and Sustainability strategies
that deliver real value to their business whilst also
minimising potential risks.
• If you would like to learn more about how CSR/
Sustainability can drive value for your business, please feel
free to contact us by either emailing
kate@4frontconsulting.com or calling +44 (0)20 8332 3912.

18. References
•
C.Krosinsky and D.Lubin (2013) theguardian.com,
http://links.sharedby.co/share/PZ4mdj, 04/10/13.
•
C.Carson (2013) GreenBiz.com, Why firms fall short on touting their
sustainability work, 04/10/13.
•
P.Lacy and R.Hayward (2013) The UN Global Compact – Accenture
CEO Study on Sustainability 2013, 04/10/13.
•
D.Woods (2011) CSR could be the key to boosting engagement and
productivity, 04/10/13.
•
GALLUP - http://www.gallup.com/strategicconsulting/enus/employeeengagement.aspx