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Many companies striving to be good corporate citizens today face an internal tug of war between giving attention to community initiatives that address social problems and the growing demand to make environmental issues paramount.
Center’s new 2009 State of Corporate Citizenship report shows corporate responsibility weathering the economic storm
By Vesela Veleva, Research Manager, Boston College Center
The findings of the 2009 State of Corporate Citizenship in the United States released today reveal that, despite the recession, corporate citizenship practices are ingrained in increasing numbers of American businesses. A majority (54 percent) of business leaders report that attention to corporate citizenship efforts is even more important in a recession.
The executives also say business should take a greater role solving problems in health care, product safety, education, and climate change, but dismiss the need for greater regulatory oversight by the federal government.
Our research team also saw significant expansion of environmental sustainability efforts (greening of products, services and operations), and increasing integration of corporate citizenship into the business strategy, with 75% of CEOs leading the agenda and 40 percent of all companies (65% for large companies) have a team or individual assigned to work on corporate citizenship issues.
As in the 2007 survey, the most recent data also show that attitudes of support for corporate citizenship are strong but there remain some gaps between those beliefs and the practices and investments of some businesses.
It’s worth setting aside a couple of hours to read the full report. The executives were asked about a wide range of topics – from what drives their company’s corporate citizenship (reputational value and the companies’ traditions and values top the list) to how their philanthropy is faring (38 percent reported a decline in giving) to how the economy is affecting R&D for new sustainable products (up 15 percent) and so much more.
The State of Corporate Citizenship in the United States 2009 is a joint project of the Boston College Center and The Hitachi Foundation. It is the only research of its kind to provide a comprehensive overview of small, medium, and large-sized U.S. businesses.
Highlights of the survey include:
- Despite upheaval in the economy, a majority of U.S. companies are not making major changes in their corporate citizenship practices. Of those who made changes 38% reduced philanthropy/giving, 27% increased layoffs, and 19% reduced R&D for sustainable products.
- Most U.S. senior executives believe business should be more involved than it is today in addressing major public issues including health care, product safety, education, and climate change. Surveyed in June, just as the national debate on health care began to intensify, some 65 percent said business should increase its involvement in this issue.
- Reputation was cited by 70% as a driver for corporate citizenship, tied for the top spot with “it fits our company traditions and values.”
- The citizenship response during the recession differed between larger and smaller companies. Large companies significantly increased their investments and involvement in citizenship activities, but were more likely to impose layoffs. Small firms stayed committed to their emphasis on treating employees well by minimizing layoffs. But they significantly decreased attention to other aspects of citizenship.
- Based on current economic conditions, 15% of companies are increasing R&D for new sustainable products; 11% are increasing corporate citizenship marketing and communications; and 10% are increasing local and/or domestic sourcing or manufacturing.
- Half of the businesses are supporting skill development for employees making less than $40,000 annually and see these efforts as boosting productivity.
- Only 34 percent of executives who responded to the survey say greater regulatory oversight by the federal government is an important part of solving the current economic crisis and creating a more stable economy.
Conducted by GlobeScan between June 4 and June 23 of this year, the survey queried 756 executives, 36% of whom were at small businesses (1-99 employees), 24% at medium (100-999), and 40% at large companies (1000 + employees). The biennial survey was first conducted in 2003.
View the State of Corporate Citizenship here.
October 5th, 2009 at 6:31 PM
This report is both timely and important. As a practitioner in the field of Corporate Social Responsibility, it provides me with essential data that is reliable and comprehensive. We are huge fans of the work of the Center for Corporate Citizenship and are very grateful for their work.
Of particular value is the easy access to findings through simple charts and diagrams as well as succinct summaries. What’s more, the comparisons between large and small to mid-size companies offers a useful dissection to understand constraints and opportunities unique to each group.
It is precisely because of the high value of this report that I do want to offer a critical observation. Throughout the report, and certainly as the future of corporate citizenship is considered, the idea of an holistic approach to corporate citizenship is advocated. I couldn’t agree more fervently with the statement that in order to address social challenges business leaders must “move well beyond traditional notions and models of corporate citizenship based primarily on philanthropy to look holistically at the role and impact of business on society and engage actively in bringing their assets to bear on addressing society’s challenges” (pg 43).
Yet I was confused to read on the page previous ‘The challenge for companies as they engage in the public policy arena will be to separate their immediate self interest and interest of their shareholders from the broader interests of society and their role as corporate citizens” (pg 42). Is this separation possible? If it was possible, would it be a good thing? Probably not. Creating an either-or conversation around the board room table on the topic of Corporate Citizenship is not a good approach. In fact, it isn’t even the approach of Boston College. An integrated, or both-and approach guarantees the success of Corporate Social Responsibility by tying the self interests of the company to the interests of the broader community. Once these concepts are inextricably linked, companies are able to make good strategic choices without wondering about priorities.
Again, thanks so much for producing reports with essential information such as this. We are huge advocates of BCCCC and the important leadership role you are playing in this field.
October 8th, 2009 at 12:36 PM
Thank you for the kind word regarding our report – it is always such pleasure to see people using the research.
I couldn’t agree more with your comment about the separation of the immediate business interests from the society’s interests – in an ideal world where companies practice strategic CC (or CSR), that would be the case. Unfortunately, we often find (particularly in publicly held companies) that the pressures to deliver to shareholders each quarter take much greater priority over social and environmental issues of longer-term timeframe. A recent study by MIT/Sloan and Boston Consulting Group also arrived at a similar finding.
We hope through our courses, webinars, convenings and research reports we can move business further along in realizing the importance of considering societal interests in their day-to-day business decisions.
Thank you again for your message and hope this helps address your concern.
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