We generally think of corporate social responsibility (CSR) as a sort of feel-good policy, as something that is good for public policy or public relations but not a company’s bottom line. But my research finds that good corporate citizenship can actually lead to superior financial performance. A company’s social engagement is actually a resource that can create positive value and improve competitiveness. Read More
In recent years, the call for corporate social responsibility has grown louder, and many companies have committed to serious CSR programs.
However, a big question for companies is to what extent CSR—specifically behavior that affects the environment—actually alters shareholder value. Is it better to pursue a single bottom line, or do shareholders benefit more when a company supports the “triple bottom line” that includes people, the planet, and profits?
It’s easy to see that a company’s environmental footprint can sometimes make a big difference in shareholder value, as when the BP oil spill, in April 2010, sent BP’s stock price plummeting from $59.50 that day to $28.90 by the end of June, reducing shareholder value by half. But that was a dramatic event, the biggest offshore oil spill in U.S. history. What about lesser happenings at other companies?
To find out, I tracked hundreds of articles in The Wall Street Journal for relevant press coverage on responsible and irresponsible environmental behavior by U.S. publicly-traded companies from 1980 to 2009. Then I analyzed how the stock market had reacted to those events and looked for trends over the past three decades.
To read more, please visit Forbes at: http://www.forbes.com/sites/forbesleadershipforum/2011/08/30/csr-pays-for-itself-heres-the-evidence/