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How to Make Money from CSR Activities

CSRGood product performance pays while good environmental performance doesn’t, research published in Strategic Management Journal says.

Earlier studies show mixed results on the financial benefits of corporate social responsibility activities; in this one, researchers from the University of South Carolina and the University of Nebraska examined the profitability of two CSR components: product social performance and environmental social performance.

Lauren Turner writes about the research in a Network for Business Sustainability blog and suggests three tips for profiting from CSR activities.

  1. Invest in socially responsible products. She cites Toyota as an example: the automaker markets socially responsible vehicles and is regularly rated as being environmentally responsible.
  2. Don’t ignore environmental performance. While good environmental performance may not benefit firms financially, lapses in environmentally focused CSR activities can hurt the bottom line.
  3. Tie environmental performance to other tangible stakeholder interests. Turner suggests linking new supply chain efficiencies to competitive advantages or increased market access, in addition to the more abstract environmental outcomes.

Companies that introduce a sustainability strategy throughout their supply chain generally see a boost in their financial performance — but those that don’t fully commit to the strategy generally see a decline in revenue, according to a study published earlier this year by Clark University researchers.

Image Credit: CSR signpost via Shutterstock


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