A new study released by Tuck Business School at Dartmouth looks at whether CSR provides financial benefit to companies, specifically within the grocery retail industry, by looking at four dimensions of CSR and how they impact positive perceptions and whether consumers modified their purchase behavior based on these perceptions.
The study’s hypothesis was based on a review of CSR impacts on financial performance across a number of industrial sectors, and argued that “we don’t really know about whether, how and how much CSR benefits the company.” Overall, results demonstrated the financial benefit to grocery stores in terms of “share of wallet” – particularly when CSR programming was specific to consumers’ direct experience with the grocery store, such as fair compensation for the staff they dealt with and locally-sourced food they bought. Broader initiatives that impacted general goodwill, such as environmental and community program, had less of an impact of share of wallet. The take-away from this latest study is that not all CSR efforts garner benefits equally for companies – and the resulting paper will undoubtedly contribute to ongoing evidence-informed analysis of best practices. But does the premise of whether CSR provides value need to be proven? The benefits of corporate responsibility – both the tangible and intangible – are long-studied and have been continually examined as business practices and consumer and stakeholder attitudes and beliefs have changed. Global reviews that prove the business case (and societal benefit) come from the Harvard Business Review, GlobeScan and BSR, among others.
So why do we seem to need to continually validate CSR? Perhaps it’s that stakeholder and consumer trust of corporations is inherently volatile. Or the belief that proven approaches to addressing global problems need all sectors at the table? Last year’s Economist conference on corporate responsibility hosted C-level advocates from such companies as Coca-Cola, Timberland and Procter & Gamble along with academics and global thought leaders in a discussion about how – not if – the corporate sector will play a leadership role with government and citizens in facing face today’s issues of climate change, the financial crisis and sustainability.