"I recognize that it has become very fashionable in corporate circles to talk about values, and often there is little behind that talk. However, for the vanguard companies we studied, values truly are a primary consideration. They help the companies find business opportunities and motivate both employees and partners." - Rosabeth Moss Kanter          Source: Harvard Business Review. January 2008. Transforming Giants

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Another perspective on the economic viability of corporate social responsibility:

"Attaining Sustainable Growth through Corporate Social Responsibility"

by George Pohle, VP and Global Leader, IBM Business Strategy Consulting  Practice and Jeff Hittner, Corporate Social Responsibility Leader, IBM Institute for Business Value

To read the full report, visit www.ibm.com

"The report examines three dynamics – impact, information and relationships - and makes recommendations that will help companies develop an integrated Corporate Social Responsibility (CSR) strategy geared to growth opportunities.

Businesses are rapidly moving beyond the idea of CSR as simply a necessary cost of doing business. Behind this new development is the unique role of the Internet in influencing buying behavior by providing ubiquitous, in-depth information about companies, their global supply chain partners, and their impact on society and the environment. To gauge how deeply CSR has penetrated the core of the corporation — it's strategies and operations, IBM surveyed more than 250 business leaders globally and found that two-thirds of them are focusing on CSR activities to create new revenue streams. Yet fewer than one-quarter believe they understand their customers' CSR expectations well, a potentially alarming finding at a time when new customer expectations - and clout - are rapidly growing.

Our analyses uncovered three dynamics for companies to understand and act upon in dealing with the threats and opportunities of CSR:

Impact - from cost to growth

Information - from visibility to transparency

Relationships - from containment to engagement

The Internet has already triggered lasting change in the structures of industries and the ways businesses create value. Today, ubiquitous connectivity is creating new relationships among businesses, customers, employees and partners. People now have access to massive amounts of information — and opinions — about products and company practices. This information is available in every part of the globe, every minute of every day.

But the Internet does more than spread information. It's also a place where people get together to discuss and organize activities to bring about social change. As a result, sustainability, both for societies and enterprises, will require mutual accountability — a more collaborative relationship that allows each party to reach a shared understanding and thrive.

This collaboration is particularly challenging because it takes place during a time of increased visibility of corporate actions. It's also a time when customers' perceptions of companies and their consequent purchasing behaviors are fundamentally changing. And yet, because that means significant financial impact for businesses, CSR is no longer viewed as just a regulatory or discretionary cost, but an investment that brings financial returns.

Our survey of 250 business leaders worldwide found that businesses are wasting no time in interpreting these implications and acting on them: When companies talk about CSR publicly, they tend to describe it in terms of philanthropy. Our survey, however, found that businesses have actually assimilated a much more strategic view; 68 percent are now utilizing CSR as an opportunity and a platform for growth.

Based on our conversations with business leaders and our own survey of their actions and expectations, it appears incontrovertibly true that business executives are starting to see CSR as a sustainable growth strategy.

It's equally true that the more advanced view of CSR demands significant long-term commitment, and definition (or re-definition) of corporate values. It can also require wholesale changes to the ways companies operate.

Finally, it will require a finely honed appreciation of customers' concerns. A potentially alarming finding from our survey is that 76 percent of the business leaders surveyed admitted they don't understand their customers' CSR expectations well.

Our analysis led us to three dynamics that companies should understand and act upon in dealing with CSR:

Impact on business — From cost to growth.  When aligned with business objectives, companies are beginning to see that CSR can bring competitive differentiation, permission to enter new markets, and favorable positioning in the talent wars.

Our approach is to view a company's current activities and objectives against the CSR Value Curve, which captures the shift in thinking from CSR as a cost or risk mitigation effort to CSR as a strategic goal that brings in new revenues.

As companies move from left to right on the value curve, greater returns are realized as CSR becomes more integrated into core business strategy.

Information — From visibility to transparency.  In today's open environment, companies are finding it necessary to take the wraps off information they once considered private or proprietary. With relentless pressure from watchdog groups, “need to know” restrictions tend to fall away. So, visibility is best met with a continuous exchange of information — or transparency.  What seems like an insatiable thirst for information is in reality a drive for relevant information that can reduce complexity and increase comfort level with purchase decisions. Companies that figure out how to make information relevant will win customers' trust — and build a powerful platform for growth.

Relationships — From containment to engagement.  When CSR strategies are effective, transparency, as discussed in the previous section, goes hand-in-hand with stakeholder engagement — with two important caveats First, you can't call it transparency if you simply spew information out into the marketplace, or unleash what is effectively a data dump on your customers. It could even backfire.

True communication requires not just context, but interaction among the parties giving and receiving information. Second, trying to engage stakeholders without full transparency is disingenuous at best.

When these activities are done in combination, CSR can become a dimension of a company's successful competitive strategy. Done right, it offers a company improved relationships with all of its key constituents, more loyal customers, lower costs, higher revenues and an overall improvement of the business' standing in society."