key questions. How do the two factories compare in emissions of greenhouse
gases? How about employee turnover? Investment in workers? Managers can
get a fuller picture and make wiser decisions.
CSR increases profits .........................................................................
Finally, let’s not forget the good old bottom line: profits. In the KPMG Inter-
national Survey of Corporate Responsibility Reporting, economic factors
were listed as the top driver behind this movement.
Sustainability helps companies reduce inefficiency and minimize lost profits.
Saving resources and energy means reducing costs for both procurement and
waste at the same time. Improvements in environmental, health, and safety
measures have a real payoff: fewer accidents, fewer lost workdays, and fewer
fines. Environmentally sound products gain more market share and earn
more profits. Balancing social, environmental, and economic considerations
contributes to long-term prosperity.
Sustainability management is good management. Pharmaceutical companies
receiving above average EcoValue21(r) ratings have outperformed companies
with below average ratings by approximately 17 percentage points (1700
basis points) since May 2001.
Similarly, a report by the Economist Intelligence Unit found a strong correla-
tion between sustainability efforts and profits: Companies that rated their
sustainability efforts most highly saw annual profit increases of 16 percent
and share price growth of 45 percent. Those that ranked their own efforts
poorly saw profits grow by only 7 percent and share price by 12 percent.
Business is still about the bottom line, but now there are three of them: profit,
environmental impact, and social impact. Nearly 70 percent of chief execu-
tives of mid-sized to large companies believe that sustainability is vital to
their profitability, and more than two-thirds say it will remain a high priority,
according to recent global client surveys by Price Waterhouse Coopers. The
business of business is stillbusiness — it just has to operate in a new climate.
Sustainability is about adapting to a changing world. And, like Darwin told us,
the ones who adapt best survive, and the ones who don’t become extinct.
Consumers reward companies whose CSR programs:
Have a good fit with the business mission and strategy.Demonstrate proactive versus reactive timing (regardless of whether
motivation is profit or altruism).
Make solid business sense. Sustainability is not about charity. If it is not
good business, consumers are skeptical.