BCCCC State of Corporate Citizenship 2012

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This file is the full 2012 State of Corporate Citizenship report from Boston College Center for Corporate Citizenship. This report was highlighted in the February 2013 Best Practice Network Webinar on February 12, 2013.

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BCCCC State of Corporate Citizenship 2012

  1. 1. Commitment to ValueThe State of Corporate Citizenship 2012
  2. 2. Boston College Center for Corporate Citizenshipwww.BCCorporateCitizenship.org
  3. 3. State of Corporate Citizenship 2012Table of contents2 Executive summary 3 Key findings 4 Economic context for business 5 The executive point of view9 Report findings11 Integration of citizenship and business goals 11 Reputation and trust14 Alignment of corporate citizenship 14 Connecting with business value 15 Connecting with stakeholder interests 16 Characteristics and priorities 18 Perspectives of executives and consumers on issues and causes 25 Industry perspective influences corporate citizenship strategy 25 Protecting and preserving the environment 25 The employment environment and competition for workers 25 Building reputation and trust30 Commitment to corporate citizenship 30 Long-term approach brings returns 31 Environmental stewardship leads in resource allocation 31 Investment and commitment remain high36 Conclusion37 Profile of companies surveyed39 Methodology41 Works cited© Copyright 2012 Boston College Center for Corporate Citizenship. All rights reserved. This publication was prepared byBoston College Center for Corporate Citizenship and may not be reprinted without permission. www.BCCorporateCitizenship.org 1
  4. 4. The State of Corporate Citizenship 2012 Executive Summary In the 2012 State of Corporate Citizenship, executives issue a clear verdict — corporate citizenship delivers real business results. It doesn’t just make firms look good and employees feel good. It helps to achieve business goals such as increasing market share and managing risk. This report, conducted by the Boston College Center for Corporate Citizenship, is the fifth biennial survey of the attitudes and commitments of business executives toward corporate citizenship. In this year’s survey, executives who say that corporate citizenship contributes to their companies’ business goals are more likely to report success with those goals. This is true across every kind of business objective tracked in the survey – and most pronounced with reputation and corporate culture. Respondents who say that their corporate citizenship activities are intertwined with their efforts to enhance reputation and corporate culture are up to nine times more likely to report successes in those areas. The inverse is also true: Executives whose companies do not use corporate citizenship to help achieve business goals are less likely to report success with those goals. Taken together, these results suggest that firms that integrate corporate citizenship with business goals have at their disposal a more robust set of tools for serving customers, shareholders, and communities. The surveyed executives also report that, even in the face of an anemic economy and a volatile stock market, their firms sustained or increased resources on corporate citizenship – and they projected that these resources would be sustained or increased for the next three years.2 www.BCCorporateCitizenship.org
  5. 5. State of Corporate Citizenship 2012Key findings for 2012 • Duration of investment in corporate citizenship appears to have an impact on success with related • Eighty percent or more of all executives, across business objectives. The percentages of those re- all business types and industries, confirm that porting success in achieving business objectives environmental, social, and governance invest- increased as the duration of an average corporate ments create financial value for their companies. citizenship effort increased. Increases ranged 30 to 50 percent when comparing durations on • Companies that align corporate citizenship one year or less versus four years or more. strategy with overall corporate strategy are more likely to achieve important business objectives. • Companies serving business-to-business (B2B) With reputation- and corporate culture-related and business-to-consumer (B2C) markets place objectives, success was as much as nine times more emphasis on corporate citizenship than more likely for those who integrated than for those companies operating only in B2C markets. those who did not. Executives from solely B2C companies express the least confidence that corporate citizenship • Environmental sustainability programs received generates shareholder returns. This may be the greatest increases in funding over the past attributable to consumers’ reluctance to fully three years and are expected to continue to be a embrace higher prices related to the cost of funding priority over the next three. socially or environmentally conscious products. 75% or more of respondents said these activites contributed to corporate citizenship success • Engagement with stakeholders • Compliance & transparency • Tax compliance • Fair employment practices • Philanthropy/corporate giving • Waste reduction & recycling programs • Diversity among employees & supply chain partners 40% or more of respondents said they will increase resources for those activities highlighted in purple www.BCCorporateCitizenship.org 3
  6. 6. Boston College Center for Corporate Citizenship Economic context for business States and world economies as they continued to recover from the financial crisis of late 2008 and To fully appreciate the value of corporate citizen- early 2009, and the ensuing recession. Globally, the ship and the insights derived from this study, it is Eurozone’s sovereign debt crisis and banking woes, important to understand the economic climate in and a slowdown in China are hampering growth which the survey respondents are operating and the and keeping the recovery sluggish. The OECD, impact this has on their environmental, social, and however, projects moderate improvement in the governance initiatives. global economy in the coming year. Specifically: According to the Organization for Economic Co- • Business confidence has started to stabilize and operation and Development (OECD), the first nine order books appear to be stabilizing and even months of 2012 were a struggle for the United turning up in many of the major economies. (See Figure 1). • Business investment remains below longer-term Figure 1 norms in many countries but has risen since the Stabilization of business confidence in major economies start of the recovery, buoyed by strong corporate profits and healthy balance sheets. • Growth in the United States will pick up slowly, with private consumption helping to lower un- employment, which is projected to drop below 7.5 percent by the end of 2013. Future expectations The OECD predicts that over the longer term, demographic changes including aging populations in the developed world, and macro-economic forc- es such as shifting labor participation and rising productivity, will result in shifts in the composition of global GDP (see Figure 2; (The Economist 2011)) Specific factors driving this change include: • The growth of developing countries – project- ed to continue to outpace that of developed countries – driven primarily by a catch-up in productivity. • The pace of developing-world growth – projected to decline to around an average of 5 percent per year in the 2020s, down from more than 7 per- Source: Markit. OECD (2012), OECD Economic Outlook, Vol. 2012/1, OECD Publishing cent a year over the past decade. 4 www.BCCorporateCitizenship.org
  7. 7. State of Corporate Citizenship 2012Figure 2 The executive point of viewGDP and employment When executives were asked how the economy Q4 2007 - Q3 2011, % change affected their ability to engage in corporate citi- China zenship, the most common comments centered around reductions in resources and the pressure India na to focus initiatives carefully. Analysis of the re- Brazil sponses to the open-ended question about the Germany economy’s impact captured the words and phras- US nil es used most frequently by respondents. The more frequently a word or phrase was used, the Euro area larger it appears in a graphic such as the one be- Japan low. The arrows indicate the relation of words or Spain phrases to each other. Italy -15% -5% 5% 15% 25% 35% As illustrated in the graphic below, the word “reduced” was one of the words used most fre- GDP Employment quently, often relative to “efforts” and “financial.” Source: Haver Analytics, as published in The Economist, 2011 Interestingly, analysis also shows the word “ef- forts” was frequently related to both “increased” and “decreased,” indicating variation in both the Figure 3 Executives comment on impact economic of economy on corporate citizenship pressure + efforts – reduced constraints financial growth financial economic budget www.BCCorporateCitizenship.org 5
  8. 8. Boston College Center for Corporate Citizenship effects and responses to economic pressures. communities and be a good neighbor. Also a bigger Another frequent, and not surprising, connec- sense of urgency to contribute more time and money to tion in respondents’ comments is the word “con- charitable organizations.” straints,” relative to “growth,” “financial,” “eco- nomic,” and “budget.” “The current economic crisis makes it difficult to continue or increase corporate citizenship efforts.” Some examples of comments by respondents: “The weak economy has hindered the effort and “There is a greater sense that as a large company removed much of the financial support.” we have a responsibility to do more to support our Figure 4 Figure 5 Factors most frequently reported as Factors most frequently reported as helping hindering success of corporate citizenship success of corporate citizenship Levels of support among managers in company Levels of support among executives at company Levels of support among non-mgmt. employees in company Levels of public trust Media attention Global market competition Pressure for long-term financial performance US economy US political environment Regulatory environment Pressure for short-term financial performance Political environment outside the US Annual revenues $5 billion and over Annual revenues Executive turnover $1 billion - $4.99 billion Annual revenues 70% 60% 50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% Less than $1 billion6 www.BCCorporateCitizenship.org
  9. 9. State of Corporate Citizenship 2012“It has caused us to decrease our donations to charita- When asked to select from a list of factors that ble groups and forced us to spend less time on making hindered or helped the success of corporate citi-a difference in our communities in which we operate.” zenship, respondents most frequently reported the U.S. economy as a hindrance, and most fre-“The current climate causes our company and others quently selected support among managers in the to have to tighten our belts and slows down progress company as helping (see Figures 4 and 5).in every area.” Figure 4 Corporate citizenship programs in medium-Figure 6Current economic climate negative sized companies were most hindered byinfluence on CC efforts, by industry the economy, those in small businesses were most hindered by pressure to deliverAccommodation and food services short-term results, and those large busi- Construction nesses were most affected by the U.S. Health care and social assistance economy and pressure to deliver short- Professional, scientific, term results. and technical services Manufacturing Figure 5 Finance and insurance Executive turnover both helped and Information hindered small businesses more thanArts, entertainment, and recreation their larger counterparts. Large busi- nesses were better able to take advan- Average across industries tage of global market competition. Small Transportation and warehousing businesses were helped most by the Waste and facilities management, holding companies U.S. economy compared to large and Utilities and mining medium size companies. Levels of support Retail trade from managers and executives were most important to large and medium business- Wholesale trade es. Companies of all sizes were helped Services other than public administration equally by public trust. 0% 10% 20% 30% 40% 50% 60% Figure 6 Some industries experienced relatively little impact from the down economy, notably and surprisingly, utilities and min- ing, retail trade, wholesale, and services. www.BCCorporateCitizenship.org 7
  10. 10. Boston College Center for Corporate Citizenship Microsoft’s Smith calls corporate citizenship a company’s conscience Microsoft was the company most frequently named by respondents as the leaders in corporate citizenship. Brad Smith, Microsoft general counsel and executive vice president, Legal and Corporate Affairs, appeared at the Cen- ter’s 2012 International Corporate Citizenship Conference and shared the story of Microsoft’s journey to pursue initiatives that deliver real impact and join the strategy and larger purpose in society. Smith told attendees their job is to ensure their companies’ efforts are real, a part of the fabric of what and who they are as companies. “If it’s just the cherry on top of the cake, the applause, while initially loud, typically doesn’t last,” he said. Smith stressed the importance of measurement and knowing “not just what you are doing, but what you are doing with impact.” He said companies also must be willing to put them- selves out there a bit to persuade critics of the sincerity of what they are doing. He talked about the need to challenge the firm to push the limits of the status quo and to give more momentum to overall efforts by thinking not only about individual initiatives but also about their cumulative effects. Microsoft chose to integrate its philanthropy with public policy positions on education fund- ing and immigration reform. The company’s effort on immigration took flight when three employees urged the company to help refugees of the Bosnia-Kosovo war. This led to creation of technology with HP to provide identity cards for refugees, building of a database to reunite families, and later a national nonprofit to support refugee children who had become separated from parents and faced deportation. A true test of what it means to work responsibly comes when problems arise. Smith recalled Microsoft’s response when a 2010 New York Times story claimed the company was complicit in a crackdown by Russian prosecutors on small newspapers and NGOs for software counter- feit. Microsoft put a program in place within 24 hours to create blanket license agreements to automatically and immediately apply to every NGO and newspaper in Russia. Smith said the case provided fundamental learning about the difference between managing problems and solving them. To drive corporate engagement into the realm of problem-solving, Smith remarked, every large institution needs a conscience. That conscience may not have every answer but it needs to be heard. It is, he said, what corporate citizenship is all about. “It’s the work that will make corporate citizenship real, and I believe that should be our goal.”8 www.BCCorporateCitizenship.org
  11. 11. The State of Corporate Citizenship 2012 Report findings The State of Corporate Citizenship reports how U.S. executives view corporate citizenship and their firms’ performance in the environmental, social, and governance dimensions of business – and about how corporate citizenship contributes to business objectives such as increasing market share and improving financial performance. Corporate citizenship is defined as corporate initiatives related to “community involvement, philanthropy, environmental, and governance issues.” This is the fifth such report since 2003, and it is built upon an online survey of executives from 749 mostly medium and large U.S. companies operating both domestically and globally. In 2012, commitment to corporate citizenship is burgeoning. Despite a tough economy, investment in corporate citizenship has taken hold, with the majority of executives reporting continued commitment to almost all dimensions of citizenship. Even during the difficult economic times of the past three years, resources for corporate citizenship were sustained or increased. Financial and executive-level commitment to citizenship efforts is high, though not equal across industries or priorities. Executives say that their companies value all corporate citizenship areas to some extent and that resources have been sustained or grown across all areas over the past three years. There is reason for optimism about continued progress. When asked about future levels of investment, respondents predict sustained or increased levels, with the highest increases projected for environmental programs. www.BCCorporateCitizenship.org 9
  12. 12. Boston College Center for Corporate Citizenship Travelers EDGE investment brings returns for the community and the company For The Travelers Companies, Inc., funding education programs in the community is an important investment in youth, the economy and, ultimately, the sustainability of the company. These investments, which focus on communities in the Hartford, Conn., and St. Paul, Minn., regions, are designed to strengthen local education and provide a long-term return on investment back to Travelers in the form of an educated workforce. The company’s signature education program, Travelers EDGE (Empowering Dreams Marlene Ibsen for Graduation and Employment), creates a pipeline for under- Vice President of Community Relations represented students to develop the skills necessary for success in college and ultimately the workplace. “The quality of life in our communities, and the health of our business, depends on a well- educated population,” said Marlene Ibsen, vice president of Community Relations. “This pro- gram is building a pipeline of diverse, talented candidates for our company and our industry.” The primary objective of Travelers EDGE is to increase the number of underrepresented stu- dents who complete a bachelor’s degree and are prepared for a career at Travelers or within the insurance and financial services industry. Additionally, the Travelers EDGE program pro- vides an in-depth approach to supporting students, including opportunities for mentoring, internships, academic support, and professional development – designed to provide students with a competitive “EDGE” for their futures. Travelers is one of the nation’s largest property casualty companies with more than 30,000 employees, 13,000 independent agents and multiple market segments across the personal, business, financial, and international insurance groups. In 2011, Travelers employees contrib- uted more than 31,000 corporate and personal volunteer hours, up from 22,000 the previous year. Travelers and the Travelers Foundation in 2011 provided approximately $21 million in commu- nity support with approximately $9.5 million directed to educational causes and organizations. Additional charitable giving is directed to arts, culture, and community development activities.10 www.BCCorporateCitizenship.org
  13. 13. State of Corporate Citizenship 2012Integration of citizenship andbusiness goalsThis year’s key finding is that executives who say Figure 7their companies’ corporate citizenship contributes Corporate citizenship’s contribution –to achieving business goals are also more likely Success in achieving various outcomesto report success with those goals. This was true across all business objectives, and it was most pro- Improve ability to motivate employeesnounced in objectives related to reputation and cor- Help solve social problemsporate culture. Executives reporting integration of Meet and managecorporate citizenship and business goals are up to community expectations Remediatenine times more likely to report success with repu- environmental damage Preserve the naturaltational and cultural goals (see Figure 8c), with the environmentmost pronounced gains in an improved ability to Increase awareness of issuesmotivate employees (see Figure 7). Enhancing reputation Improve ability to retainIn contrast, companies that do not use their citi- employeeszenship to help achieve business goals are less Fostering greater public trustlikely to report success with those goals. Taken to- Reducing waste in business operationsgether, these results suggest that firms committed Reinforce firm traditions and valuesto citizenship have a more robust set of tools for Managing regulatoryachieving their business goals and serving their environment Improve ability to recruitcustomers, shareholders, and communities. employees Managing and meeting the expectations of consumersReputation and trust Improving risk management Maximize profit forCorporate citizenship has the greatest impact on owners/shareholderscompanies’ reputations and corporate cultures and Secure sustainable supply chainthe largest companies benefit the most. Eighty- Improve access to financethree percent of respondents whose companies Improve accesshave revenues of more than $5 billion say that cor- to new marketsporate citizenship contributes to their success in Increase market sharefostering public trust. 50% 60% 70% 80% 90% 100% Integrated corporate citizenship Unintegrated corporate citizenshipSmaller companies benefit, too, although not as much. Among respondents whose companies have This comparison of two questions regardingrevenues of less than $1 billion, 72 percent report corporate citizenship integration and businessthat corporate citizenship contributes to enhanced success illustrates that corporate citizenshipreputation and corporate culture. investments can improve the likelihood of success with important business objectives. www.BCCorporateCitizenship.org 11
  14. 14. Boston College Center for Corporate Citizenship Figure 8A Figure 8B Business outcomes and integration of corporate citizenship Manage consumer expectations Likelihood of reported successful outcomes 5x Manage consumer expectations 4x Increase market share Retain employees Enhance reputation 3x Reduce waste Motivate employees 2x Retain employees 1x Reinforce firm traditions and values This chart is a comparison of three questions regard- ing integration, success with business outcomes, and Risk management importance of business outcomes. In Figure 8a, the size of the bubble illustrates the importance executives place on that outcome. The larger the circle, the more Recruit employees important. Manage community expectations Figure 8b illustrates the increased likelihood of reported success among those who integrate corporate citizen- Reduce waste ship in overall business strategy as compared to those who do not integrate citizenship. In figure 8b, those Foster greater public trust that integrate corporate citizenship are 4X more likely Sustainable supply chain to report success with meeting consumer expectations and 3X more likely to report success with retaining Help solve social problems employees. There were substantial differences across the importance of a sustainable supply chain, industries, in terms of which business outcomes improving employee recruitment, and preserving respondents reported their firms achieving suc- the natural environment (more than a 5 percent cessfully, and in how and to what degree corporate difference for each outcome). citizenship initiatives contribute to that success. These differences likely reflect variation in the ma- Companies that serve both B2C and B2B teriality of issues and activities across industries. markets value citizenship activities that foster rep- utation and public trust and that protect the natural A higher percentage of respondents from publicly environment more than businesses that operated traded companies than from private firms report either solely in the B2B or B2C markets.12 www.BCCorporateCitizenship.org
  15. 15. State of Corporate Citizenship 2012Figure 8CIntersection of corporate citizenship and reported successwith achieving business success Reinforce firm traditions and values Enhance reputation 9x Likelihood of reported successful outcomes when corporate citizenship is integrated 8x Foster greater public trust Manage community expectations 7x 6x Help solve social problems Motivate employees 5x 4x Recruit employees Manage consumer expectations Retain employees 3x Sustainable supply chain 2x Reduce waste Risk management Increase market share 1x 0x 1x 2x 3x 4x 5x Likelihood of reported unsuccessful outcomes when corporate citizenship is not integratedFigure 8c illustrates both the increased likelihood of success with important businessobjectives on the Y axis and the increased likelihood that a firm would report being un-successful on the X axis. Looking at risk management, firms that integrated corporatecitizenship were twice as likely as firms that did not integrate to report success. Firmsthat did not integrate were 4X as likely to report being unsuccessful with that sameobjective as those that did integrate. Firms integrating corporate citizenship in achiev-ing the business objective of enhancing reputation were 9X more likely to report beingsuccessful in achieving that objective. www.BCCorporateCitizenship.org 13
  16. 16. Boston College Center for Corporate Citizenship Alignment of corporate citizenship Connecting with business value will provide no return of value to shareholders. Yet even in this skeptical group, the percentage The majority of executives believe that corporate reporting no return does not exceed 20 percent. citizenship benefits their shareholders and their bottom line. At least 80 percent of executives, across Delving down into particular kinds of citizenship, all business types and industries, confirm that envi- executives say that this pattern of support for the ronmental, social, and governance investments cre- value of investments follows similar curves over ate financial value. all three measured dimensions – environmental, social, and governance (see Figures 9, 10 and 11). Executives at public companies operating in both the B2B and B2C markets most frequently predict Environmental investments are reported most long-term returns. Their counterparts at companies frequently as returning value to shareholders. So- operating only in B2C markets are more skeptical cial investment returns are reported second most – they tend to express the least confidence that cor- frequently, followed by governance investments. porate citizenship generates shareholder returns. Though the percentage reporting return on gov- They’re also the most likely to say that citizenship ernance investments is modestly lower than those Figure 9 Figure 10 Environmental investments return value Social investments return value to shareholders by co. type and return horizon to shareholders by co. type and return horizon B2B Private B2B Private Return value to shareholders in the long term (11 years or longer) Return value to shareholders in the medium term (4-10 years) B2B Public B2B Public Return value to shareholders in the short term (1-3 years) Do not return value to shareholders B2C Private B2C Private B2C Public B2C Public B2B-B2C Private B2B-B2C Private B2B-B2C Public B2B-B2C Public 0% 10% 20% 30% 40% 50% 60% 70% 0% 10% 20% 30% 40% 50% 60% 70%14 www.BCCorporateCitizenship.org
  17. 17. State of Corporate Citizenship 2012 reporting return on environmental or social invest- does not shift much when looking at public ver- ments, it is notable that respondents from all busi- sus private companies, but some differences do ness types report that governance returns will be emerge (see Figure 13). realized almost equally in the near, medium, and long term. Public-company executives care more about me- dia than their private-company peers do (72 per- Connecting with stakeholder interests cent vs. 60 percent). And B2C executives report consideration of media more frequently than their Not surprisingly, customers matter most to ex- B2B counterparts – 67 percent vs. 58 percent. Ex- ecutives when they’re designing their citizenship ecutives at public B2C companies say media are al- programs: More than 90 percent of respondents most as high a priority as their employees. Compa- identified their customers as the stakeholders con- nies serving both B2B and B2C markets reported sidered the most as citizenship initiatives are de- consideration of supply chain partners (70 percent) veloped (see Figures 12, 13 and 14). Customers are at a higher rate than B2C alone (57 percent) and followed by board and executive leadership, com- B2B alone (62 percent). munities in which businesses operate, investors/ shareholders, and employees. The least frequently Firms’ financial health influenced the level of pri- considered stakeholders are the media, govern- ority assigned to the various stakeholders. When ment offices, supply chain partners, and NGOs. companies are stable or growing, employees rise in The order of importance assigned to each group importance as stakeholders, possibly a reflection of the need to maintain firm-specific know-how. Sup- ply chain partners also loom larger during times of Figure 11 growth (See Figure 14). Governance investments return valueto shareholders by co. type and return horizon In contrast, consideration of employees and com- munities as stakeholders slips when finances suf- B2B Private fer. Consideration of employees drops almost 20 percent in tough times. B2B Public B2C Private Figures 9, 10 and 11 There is an observable difference between how executives think about the return on environmental investments B2C Public compared to social and governance investments. Fewer believe there will be short-term returns on environmental B2B-B2C Private investments than believe there will be short-term returns on social or governance investments. Executives operating only in business-to-consumer markets tend to be the most B2B-B2C Public skeptical of the return of value to shareholders from any category of corporate citizenship investment. 0% 10% 20% 30% 40% 50% 60% 70% www.BCCorporateCitizenship.org 15
  18. 18. Boston College Center for Corporate Citizenship Characteristics and priorities Size matters A key challenge for a forward-thinking company Maximizing profits, meeting consumer expecta- is forging citizenship strategy that achieves three tions, and increasing market share are consistently goals: It aligns with concerns of stakeholders, named as top priorities by 90 percent or more of advances business goals, and contributes to the respondents. Differences start to emerge for those common good. There are broad similarities in the priorities listed. All of the priorities are considered reported importance of specific outcomes and activi- important by most respondents, but considerable ties across industries, company types, and sizes. The variation can be observed across revenue segments. most marked differences were between companies Companies with annual revenues of $5 billion or with revenues of more than $5 billion and those more annually (large companies) place higher pri- with less than $5 billion (see Figures 15 and 16 ). ority on all citizenship outcomes than those with less than $5 billion (small companies). More than 71 percent of the executives of large firms consider preserving the natural environment an important Figure 12 Figure 13 Extent to which stakeholders are considered in Extent to which stakeholders are considered in developing CC efforts by revenue/operational scope developing CC efforts by company type 90% Customers 90% Board and executive leadership 80% Communities 80% in which the business operates Investors/shareholders 70% Employees 70% General public Media Government 60% offices 60% Supply chain partners Advocacy 50% groups/ 50% Overall Less $1 billion $5 billion Operating Operating non-governmental Overall B2B B2B B2C B2C B2B- B2B- than $1 - $4.99 and over globally domestically organizations Private Public Private Public B2C B2C billion billion Private Public Across the board, companies consider customers, Public companies operating in business to board and executive leaders, operating communities, consumer markets consider the media more investors, employees, and the general public, when important in developing their corporate developing their corporate citizenship efforts. Large citizenship efforts. B2B companies consider companies may consider the general public over em- government offices at higher levels than ployees. Media, government and supply chain part- those operating only in B2C markets. ners consistently fall below those top stakeholders.16 www.BCCorporateCitizenship.org Customers Board and executive leadership Communities in which the business operates Investors/shareholders Employees General public Media Government offices Supply chain partners
  19. 19. State of Corporate Citizenship 2012 outcome. Among smaller companies, only 58 per- Figure 15 cent agree. Similar differences can be seen on the Outcomes considered necessary by size – level of importance given to reducing waste and Least variation creating sustainable supply chains (see Figure 16). Improving risk management Industry influences decisions Helping solve social problems Across industries, citizenship was reported to return Improving ability to value to the overall corporate strategy. Industries that motivate employees are most dependent on employees with firm-specif- Increasing market share ic knowledge are most likely, for example, to derive Improving access to finance value from employee engagement and employment programs. Those most dependent on raw materials Increasing awareness of issues and natural resources are most likely to derive value Improving ability to recruit employees from protecting the natural environment. Maximizing long-term profits for companys owners/shareholders Reinforcing the companys traditions and values Managing and meeting the expectations of consumers 50% 60% 70% 80% 90% 100% Figure 14 Extent to which stakeholders are considered in Figure 16 developing CC efforts by change in revenue Outcomes considered necessary by size – Greatest variation 90% Preserving the natural environment Reducing waste in 80% business operations Securing a sustainable supply chain 70% Managing and meeting the expectations of your communities Managing regulatory environment 60% Fostering greater public trust Remediating 50% environmental damage Across Decreased Decreased Remained Increased Increased Improving ability all by 10% or by 1-9% about the by 1-9% by 10% to retain employees more same or more Enhancing reputation Improving access to new markets When companies perform poorly, consideration of employees in 50% 60% 70% 80% 90% 100% Annual revenues over $5 billion development of corporate Annual revenues under $5 billion citizenship efforts drops significantly. Large companies feel greater pressure on more corporate citizenship issues, particularly related to the environment. www.BCCorporateCitizenship.org 17Advocacy groups/non-governmental organizations
  20. 20. Boston College Center for Corporate Citizenship Perspectives of executives and To help citizenship professionals make these kinds of determinations, the Center for Corporate Citi- consumers on issues and causes zenship put a tracking question into the field with Corporate citizenship professionals often debate The Nielsen Company, to which issues warrant a commitment by their firms. compare perspectives of U.S. Selecting poorly can be costly. A firm’s citizenship executives and those of glob- efforts may come to nothing if it invests heav- al consumers. All consumer ily in, say, political campaigns when its customers data in this section of the re- and employees really care about green energy or port is derived from the Nielsen Global Socially education programs. Understanding both where a Conscious Consumer Study and is used with per- company is best positioned to make an impact and mission from Nielsen. which issues are most important to its stakehold- ers is critical. Figure 17 For which issues should a company be held responsible – There is a high level U.S. executives’ agreement compared to global consumers of agreement among consumers that com- 80% panies should be held U.S. Executives responsible for envi- North America 70% Asia Pacific ronmental sustainabil- Europe ity—though that issue Middle East, 60% Africa receives lower priority & Pakistan Latin America 50% from consumers in the Middle East, Africa 40% and Pakistan. Among North American con- 30% sumers, there is a very low level of agreement 20% that companies should be held responsible for universal primary rs n n r d als s siv n ip ch es ns lth es bs y gy er er y t l in men cle atio es io er talit e al bilit te sh at ng s to r de eas tio ea nc om lo jo m at en to sea an sas w l s eur po no ni a or hu uc uc itu lh ed p w in education compared s ta an m lo di i di na ed st ed en at ta d er ve lu re a an tec an te ov hild ns us e pr w he d y bl ur ar at Re tura pe tre o rty to ica ot om d i c to other regions. There at Pr im m ta om ve em om lity ess en Im ce fo ive ve ica ase ing EM g n ss an d un l pr en e cu du po Ac ext cce ip -c d m ad cre rain ua cc in d ity m al an ac rsh an ell pr w is a general band of rs on eq e a e rs a ri t lo ev em w ss s ala se tne vir ob n-c es ol as ce te di r un M ff en r sin ea pa ST o lie e agreement on priori- S, tn ge Inc e ot Pr sure bu Cr re te al In e ID ba ov er hi e all /A ea En ve om id nd pr Pr gl sm IV cr ties that is illustrated ov Im a tH C In Er rt p e o ba lo ot pp m by the slope that is om Su De Co Pr generally followed by Consumer data from Nielsen Global Socially Conscious Consumer Study all segments.18 www.BCCorporateCitizenship.org

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