How companies deal with corporate social responsibility issues can have an impact on their own competitiveness and on national competitiveness, according to new studies.
A report published by Arthur D. Little and Business in the Community concludes that addressing corporate responsibility can help companies build market share, control risks, attract staff, stimulate innovation, gain access to cash, reduce costs and improve competitiveness. Yet most companies still fail to recognize these benefits.
According to Justin Keeble, a consultant with Arthur D. Little, “There is overwhelming evidence to suggest that responsible business activity delivers compelling business benefits. Although every case is unique, companies that manage corporate responsibility as they do any other critical part of their business, are seeing real bottom line benefits.”
The report also includes some revealing statistics:
· 62 percent of British adults do not trust business leaders
· Three in five want to work for a company whose values are consistent with our own
· More than 32 percent of mainstream analysts say Corporate Responsibility is important in the evaluation of companies
· 70 percent of fund managers say management of social and environmental risks has a positive impact on a company’s market value in the long term
· 70 percent of CEOs say corporate responsibility is vital to profitability.
Meanwhile, a report by AccountAbility suggests that how a nation deals with social and environmental issues has a direct impact on its national economic competitiveness and growth prospects. Nations that fail to address corporate responsibility issues expose businesses to potential costs such as those associated with corruption and poor health and safety performance.
Says Peter Cornelius, an international economist and former director of the global competitiveness program at the World Economic Forum, “A nation’s competitiveness and underlying productivity is clearly impacted by how its business community deals with social and environmental issues. This report offers for the first time insights into what this relationship might be, and so how to manage it going forward.”
Having studied 50 countries, the Index identifies 22—including two of the world’s largest economic powers, the U.S. and China—as having a ‘responsibility deficit’. Macroeconomic growth in these countries could be compromised by as much as 10 percent because of that deficit, the report’s authors claim.