Executives recognize value of corporate citizenship

We all know the imperatives that are used to compel corporations to make social and environmental investments. Whether talking about poverty, climate change, food security, or water scarcity – it is clear that we need solutions, and our need becomes more urgent each year.

Corporate decision makers may sometimes agree that those investments are needed but may also feel that they are not appropriate for the corporation to make because they do not see the connection to business success.

The State of Corporate Citizenship captures executive perspectives about where corporate citizenship can make contributions not only to solving social and environmental problems affecting the business context, but also where it can strengthen business performance if it is appropriately designed and resourced. Several findings in our study suggest that corporations can help solve social and environmental problems without diminishing financial performance – and that some investments may strengthen business performance.

Among the many insights derived from our soon-to-be-released report, findings suggest there are four areas that should be considered to optimize success:

  • What are the right citizenship activities for a company to engage in? Does it make most sense for a company to focus on employee engagement, philanthropy, or environmental sustainability?
    Looking at where executives in various industries report deriving greatest value from corporate citizenship, differences emerge across industries. For example, it makes sense that executives from firms in the health care and social services industries would place high priority on engagement with political causes given the landscape of health care reform. For most other industries, that activity is reported to be a lower priority.
  • Is the citizenship strategy aligned with business objectives? Has consideration been given to how citizenship might be integrated with overall business strategy?
    For those firms that did integrate corporate citizenship, there appears to be significant upside opportunity to achieve business objectives — with the greatest upsides in reinforcing firm traditions and values, enhancing reputation, and meeting consumer expectations. Connection to these objectives is not surprising, but across every outcome, likelihood of business success was increased with the integration of corporate citizenship.
  • Is the duration of a citizenship commitment adequate to achieve the desired outcomes? Is there a millennial goal attached to an annual plan? What can be expected reasonably with the resources committed?
    The longer the commitment to a corporate citizenship program, the more likely it is that it will succeed. Firms maintaining a commitment for 4 years or more are far more likely to report success in achieving citizenship and business objectives. In contrast, among executives who say their company doesn’t achieve its citizenship goals, 77 percent also say that their efforts are less than three years old.
  • Are the issues a company commits to aligned with the expectations of customers and other stakeholders? Do they logically connect to the business?
    Our survey finds customers matter most to executives when they’re designing their citizenship programs: more than 90 percent of respondents identified their customers as the stakeholders considered most as citizenship initiatives are developed. A firm’s citizenship efforts may come to nothing if it invests heavily in arts and cultural organizations when its customers really care about green energy or education programs. This finding is consistent with independent research highlighted in two of the Center’s recent research briefs on cause-related marketing and socially conscious consumers.

These and other findings of the 2012 State of Corporate Citizenship survey make it clear that a well-established corporate citizenship program that connects with the core business, aligns with strategy, and meets stakeholder expectations, can boost business performance even while addressing social and environmental problems. Executives responding to the survey affirm the value of corporate citizenship. The majority report that in the face of a challenging economy, their firms remain committed to almost all dimensions of citizenship.

When asked about future levels of investment, respondents predict they will be sustained or increased for all areas of citizenship. This demonstration of sustained commitment from executives – accompanied by a long-view of its value – positions corporate citizenship to deliver solid returns for business, the community, and the planet.

A webinar on the key findings of the 2012 State of Corporate Citizenship is available on demand to Center for Corporate Citizenship members.