For the second year in a row, consumers named Sustainable Brands® corporate member Microsoft the company with the best CSR reputation, according to a new study by corporate reputation management consultancy Reputation Institute. This year, the IT company was joined at the top in a four-way tie with fellow SB member The Walt Disney Company, Google and SB ’13 sponsor BMW.
Reputation Institute’s 2013 Global CSR RepTrak® 100 study also found that seventy-three percent of global consumers surveyed are willing to recommend companies that are perceived to be delivering on their social responsibility programs. But while consumer support for companies perceived to be socially responsible is strong, the amount of companies believed to be actually delivering on their CSR programs has dropped dramatically, from 12 in 2012 to only five in the 2013 study.
The results show that companies that understand how to create positive perceptions of their CSR programs gain the benefit in terms of sales and recommendations from consumers. However, even the biggest companies in the world are struggling to get their message across to consumers despite spending upwards of $100 million a year on their CSR programs.
“This highlights a major issue for companies who are investing millions in corporate responsibility campaigns and initiatives. Where is their return on investment with consumers?” says Kasper Ulf Nielsen, executive partner at Reputation Institute.
The study surveyed more than 55,000 consumers from 15 countries.* Results from the study demonstrate that 59% of consumers would also go out of their way to communicate something positive about companies they see as being good corporate citizens, compared to only 23% for companies perceived to be weak in this area.
“In a world where word of mouth is becoming your number one marking tool, this is a key business driver that companies need to leverage better,” says Nielsen.
According to CB Bhattacharya, E.ON chair professor in corporate responsibility at European School of Management and Technology, the answer to why companies do not achieve the ROI they should, can be attributed to how they treat the business of Corporate Responsibility: “Unfortunately, Corporate Responsibility is still equated to philanthropy in many organizations and hence, given short shrift when it comes to strategic formulation and implementation. Although the top 100 companies all have well developed websites detailing their CR initiatives, how many of them do rigorous research to find out how their key stakeholders view these same initiatives?”
Companies must move from feelings to facts when it comes to CSR strategy
While the CSR RepTrak® 2013 study confirms the business case for investing in CSR programs, it also highlights the struggle in building trust amongst consumers despite company CSR programs.
“One of the main critiques of the CSR field is the lack of data to prove the ROI on activities. Now that the CSR field has grown up from being a feel-good community to having major impact on business value, it’s time to move from feelings to facts,” says Nielsen.
Results from the Global CSR RepTrak® 100 study enable companies to determine a business value for their CSR programs. The 2013 study shows for example, that for every five points a company improves its CSR perception, recommendations from consumers increase by 9%. “Companies must recognize that creating social value is a prerequisite to creating business value. That makes monitoring and quantifying the returns on CR essential for mainstreaming CR in practice,” says Bhattacharya.
SB Community Members Top CSR RepTrak 100
The SB community featured prominently in the list, with members Nestlé, Johnson & Johnson and Philips also landing in the top 20. Microsoft placed first in three out of the four regions where the study was conducted (North America, Latin America, and Asia Pacific). Disney placed first in the fourth region — EMEA (Click here for the full CSR RepTrak 100).
In terms of rankings for the three reputation dimensions that drive consumer CSR perceptions (Citizenship, Governance and Workplace):
- The Walt Disney Company has the best perception for Citizenship. Approximately 50% of consumers surveyed agree that Disney is a good corporate citizen that supports good causes and protects the environment.
- BMW has the best perception for Governance. Approximately 49% of consumers across the 15 markets agree that BMW is a responsibly-run company that behaves ethically and is open and transparent in its business dealings.
- Google has the best perception for Workplace. Fifty-one percent of consumers across the 15 markets agree that Google is an appealing place to work that treats its employees well.
Speaking of CSR performance, Microsoft recently announced that it had achieved its goal of becoming carbon-neutral by the end of FY 2013.