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Unlocking value through CSR programs

“Creating a strong business and building a better world are not conflicting goals – they are both essential ingredients for long-term success” – William Clay Ford Jr. Executive Chairman, Ford Motor Company.

Research shows that when considering a product or service purchase, 91% of customers say “how good a company is” affects their decision. 90% say “how it behaves towards its customers and communities” is influential. Recent events in the financial markets have impacted public-perceptions of banks in specific, and there seems to be a spill over affect against the corporate community in general.

Corporates now realize that creating broader social impact is not just an ideological position any more, but one that has direct impact on the bottom-line and shareholder value.

Companies have realized the following benefit through engaging with their communities:

Showcase commitment to society

Recent issues across the developing world have proved a general apprehension cross local communities, when larger corporate announce their intent to enter such communities.

Participating in community activities and giving back through employee volunteer programs and charitable contributions tend to have a positive impact on easing such tensions and resistance. An investment in local CSR programs demonstrates consideration for your role in the community, beyond just profiting from it to give stronger returns to shareholders.

Employee Engagement:

There is a continued growth in employee-engagement programs. If the economy continues to falter, corporations are more likely to support NGOs and non-profits via employee volunteer programs. A recent sustainability study by Green Research found that 80% of major corporations are planning to invest significantly in employee engagement in 2012. According to Gallup, 86% of engaged employees say they very often feel happy at work, compared to 11% of the disengaged.

Incorporating employees into business decisions and providing them an opportunity to contribute in both financial and non-financial ways are some of the main ways managers can show trust in employees.

Differentiation tool

In an age of outsourced manufacturing & service and reduced time-to-market; creating a positive differentiation for your brand and organization seems to be pretty much an unavoidable option. With reduced play on cost-management and product-differentiation, organizations have found CSR initiatives as a positive way of increasing recall and brand-attractiveness.

Increased access to capital and investor-interest

A new study from Harvard Business School shows that socially responsible stocks outperform their more ruthless competitors by 4.8% per year.

Prior to making a commitment to a company, potential investors want to be assured that a business has a long-term plan for development. It is essential to separate a company from the rest by being prepared for the future. CSR strategies help mitigate issues such as rising energy and talent costs, while keeping the well-being of your surrounding community/environment in mind. This can increase the likelihood of investors making long-term commitments to your business, a critical factor for future success.

Twenty years ago, CSR was limited to corporate philanthropy and for some businesses, the adherence to environmental legislation. What we see today is a far more complex picture and an ever-widening stakeholder universe. Within the next few years, CSR will be a requirement for all organizations and will positively affect their bottom lines. Good business will be the norm.

Let us help your company unlock the value in CSR programs.

Read up more here or write to us today.

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