Combine economic and social performance

Companies have traditionally been motivated to engage in corporate social responsibility initiatives essentially to manage reputational risk. Philanthropic considerations have also been decisive in some cases. Either way, CSR initiatives have often proven fragile and heavily dependent on the determination of the leaders in place. Perceived to be relatively disconnected from the core business, social responsibility measures are thus at the mercy of leadership team changes and budgetary restrictions.

An inflection has been noted in recent years, however. As CSR practices mature, more and more companies are seeking to integrate their business objectives and social impact more closely. Examples such as Unilever, Wal-Mart, GlaxoSmithKline and Danone demonstrate how socially responsible initiatives can also create economic value for a business. Unilever, for instance, gained access to 600 million new consumers in India by developing the soap market in rural areas. Indeed, the World Resources Institute estimates that people earning under $3,000 a year represent a market of over five billion dollars. Moreover, McKinsey predicts that the clean technology market will hit the $1.6 billion dollar mark by 2020. Companies like Zipcar or Recyclebank have created profitable economic models by tackling serious social issues, such as the reduction of cars in circulation and recycling of waste.

By promoting new economic models, new markets, and better resource management, corporate social responsibility (CSR) opens up areas of opportunity for strategic innovation and performance enhancement. The experts stress, however, that this requires that companies treat social responsibility as an integral part of their objectives and not merely a vector for communication or risk management.