Date: September 11, 2007
Source: Grant Thornton LLP
Executives say corporate responsibility can be profitable
National survey finds companies plan increased investment despite drop in business confidence
Company executives believe that corporate responsibility programs can positively impact their business and help achieve strategic goals, according to a survey of more than 500 business executives conducted by Grant Thornton LLP, the U.S. member firm of Grant Thornton International, one of the six global accounting organizations.
While conventional wisdom might suggest that these initiatives will drain the corporate coffers, only a quarter of survey respondents agreed that profits needed to be sacrificed, while three quarters believed corporate responsibility could enhance profitability. As a result, 77 percent said they expected corporate responsibility initiatives to have a major impact on their business strategies over the next several years.
"Corporate responsibility programs have moved out of the realm of public relations to become real tools for improving the bottom line," said Jim Maurer, Grant Thornton's national managing partner of the consumer and industrial products practice. "Companies are realizing that strong investment in corporate responsibility programs is both a civic obligation and a successful business strategy."
In fact, despite the Grant Thornton Business Optimism Index (a semi-annual measure of confidence among U.S. business leaders) reaching an all-time low at the beginning of the summer, executives say their companies will increase investment in corporate responsibility: 77 percent anticipate more spending on environmental programs, 50 percent expect greater allocation to social responsibility programs and 45 percent say economic/governance initiatives will see more funding. Respondents felt that tax incentives, customer support, and innovative technologies were most likely to prompt companies to invest more heavily in environmental initiatives.
"Today, corporate responsibility programs are a large part of what customers demand," said Maurer. "What's more, if implemented correctly, they can also serve as a highly effective means of recruiting and retaining talent."
Other findings in the survey include:
19% of the companies surveyed report having a single point person in charge of all their corporate responsibility programs.
68% say they expect environmental responsibility reporting to be mandatory within the next three to five years, yet 55 percent say they have no plans to do any kind of corporate responsibility reporting.
The four greatest obstacles to successful execution of corporate responsibility programs are: focus on quarterly earnings or other short-term targets, cost of implementation, measuring and quantifying ROI, and a non-supportive corporate culture.
The three greatest benefits of enacting corporate responsibility programs are: improves public opinion, improves customer relations and attracts/retains talent.
72% of respondents believe that government should regulate companies for their effect on the environment and 56 percent said companies should be regulated for their effect on human rights and labor practices.
70% of respondents foresee increased government regulation for environmental responsibility in five years or less.
62% believe that pressure to pursue corporate responsibility programs in the future will come chiefly from consumers (45%) and investors (21%).
64% believe that the human resources department should take on social programs, 50 percent say operations should be in charge of environmental initiatives and 57 percent say finance should be responsible for economic responsibility programs.
About the Corporate Responsibility Survey
BusinessWeek Research Services conducted a detailed study of corporate responsibility in partnership with Grant Thornton. More than 500 online surveys were conducted with business executives from June 21-29, 2007. The survey included in-depth interviews with ten executives involved in the development and implementation of corporate responsibility programs.
About Grant Thornton
Grant Thornton LLP is the U.S. member firm of Grant Thornton International, one of the six global accounting, tax and business advisory organizations. Through member firms in more than 110 countries, including 50 offices in the United States, the partners and employees of Grant Thornton member firms provide personalized attention and the highest quality service to public and private clients around the globe. Visit Grant Thornton LLP at www.GrantThornton.com.
For more information, contact: