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Doing Well by Doing Good: IBM Study Says Businesses Seeking Growth Through Social Responsibility

Published 02-12-08

Submitted by IBM

ARMONK, NY -- (MARKET WIRE) -- 02/12/08 -- Companies believe that when they are more open with stakeholders and place social responsibility at the core of their business strategy they will be more competitive, attract and retain the best talent, and gain access to new business opportunities, says a global study released today by IBM (NYSE: IBM).

Many companies now see corporate social responsibility as a growth opportunity rather than just a regulatory compliance or philanthropic effort, with 68 percent of those surveyed focused on generating revenue through CSR activities. In addition, 54 percent believe CSR initiatives contribute to giving their corporations a competitive advantage.

Driving these beliefs is the rising influence of customers who, thanks to their ability to research and share information on the Internet, have become highly sensitized to a broad range of issues -- everything from concerns about climate change, to product safety issues, to labor practices, to corporate financial accountability, to questions about whether corporations are returning enough of their profits to the community.

While customers are becoming the chief driver of this increased focus on CSR, 76 percent of businesses surveyed admit they don't truly understand their customers' CSR concerns. In fact, even businesses that feel they are knowledgeable and prepared to deal with CSR issues may not be. Nearly two-thirds of companies surveyed believe they have sufficient information about the sources behind their products and services to satisfy customer concerns, but half of those admit they don't understand their customers CSR expectations well.

Fueling the customer focus on CSR, three-quarters of businesses report that the number of advocacy groups collecting and reporting information on them has increased in the last three years as has the amount of information businesses are providing about the sourcing, composition and impact of their products, services and operations.

"The more information these stakeholders get, the more they want to know. This increased visibility of corporate behavior is driving consumers' decisions on what to buy and who to buy from, who to work for, who to partner with, where to invest," said George Pohle, VP and Global Leader of IBM's Business Strategy Consulting Practice. "It's not only critical for businesses to keep up with the emerging demands of their stakeholders, but to build CSR into the core of their business strategy. That way CSR is not viewed as a discretionary cost but an investment that will bring financial returns. And since customers are changing buying behavior as a result of CSR, the financial impact can be dramatic."

The survey results are part of a new report released today by IBM Institute for Business Value, titled, "Attaining Sustainable Growth Through Corporate Social Responsibility." The full study, available at www.ibm.com/gbs/csrstudy, evaluates how well companies understand and manage CSR expectations, as well as outlines steps along the "value curve" that companies can follow to strategically align their CSR objectives to its core business strategy. According to the report, maximum benefit from the CSR opportunity takes place when all activities on the value curve -- legal and compliance, strategic philanthropy, values-based self-regulation, efficiency and growth -- become integrated into a cohesive strategy with leadership driven as much from employees, customers and business partners as from the CEO and senior executives.

IBM Survey Methodology

IBM surveyed senior executives and directors of strategy at 250 companies across the banking, chemicals and petroleum, consumer goods, electronics, energy and utilities, retail and automotive industries.

Of the participants, 30 percent are located in North America, 30 percent in Asia Pacific, 20 percent in Western Europe, seven percent in Eastern Europe, six percent in Latin America, and four percent in the Middle East and Africa.

About IBM

For more information about IBM, please visit: www.ibm.com

IBM VIRTUAL PRESS KIT:
http://www.ibm.com/press/us/en/presskit/23466.wss

Note to Editors: Broadcast-quality interview clips with IBM Business Strategy Consulting VP and Global Leader George Pohle is available for download by registered journalists at http://www.thenewsmarket.com/ibm

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Innovation – joining invention and insight to produce important, new value – is at the heart of what we are as a company. And, today, IBM is leading an evolution in corporate citizenship by contributing innovative solutions and strategies that will help transform and empower our global communities.

Our diverse and sustained programs support education, workforce development, arts and culture, and communities in need through targeted grants of technology and project funds. To learn more about our work in the context of IBM's broader corporate responsibility efforts, please visit Innovations in Corporate Responsibility.

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