Corporate Responsibility Corporate Responsibility It takes 20 years to build a reputation and five minutes to ruin it. Warren Buffet As a responsible corporate citizen our belief is that financial performance and responsibility for our environment, our employees and the global communities we touch are inextricably linked. Chart is committed to:
But few executives and managers are aware of the research on this important subject.
And as I review here, the research does show that it may improve profits. However, linking profit growth to abstract variables that are frequently difficult to define is a challenging task. Most executives believe that CSR can improve profits. They understand that CSR can promote respect for their company in the marketplace which can result in higher sales, enhance employee loyalty and attract better personnel to the firm.
Also, CSR activities focusing on sustainability issues may lower costs and improve efficiencies as well. Substantiating some of these beliefs is a study, Corporate citizenship: Corporate citizenship is another term roughly equivalent to CSR.
Corporate citizens are accountable not just to shareholders, but also to stakeholders such as employees, consumers, suppliers, local communities and society at large. The most recent study on this subject is by Cristiana Manescu.
Harjoto, and Hoje Jo, published on April 21, A meta-analysis on CSR and its link to profits won the famed socially responsible investing, Moskowitz Prize in Schmidt and Sara L.
It yielded encouraging data suggesting a positive link between CSR and increased profits. The meta-analytic findings suggest that corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility, is likely to pay off… CSP [corporate social performance] appears to be more highly correlated with accounting-based measures of CFP [corporate financial performance] than with market-based indicators, and CSP reputation indices are more highly correlated with CFP than are other indicators of CSP.
This meta-analysis establishes a greater degree of certainty with respect to the CSP-CFP relationship than is currently assumed to exist by many business scholars.
But there is another unanswered problem, and that relates to causation. On balance, surveys and the research literature suggest that what most executives believe intuitively, that CSR can improve profits, is possible.
And almost no large public company today would want to be seen unengaged in CSR. That is clear admission of how important CSR might be to their bottom line, no matter how difficult it may be to define CSR and link it to profits. Ron Robins is Founder and Analyst at the website Investing for the Soul and a financial and economics columnist for alrroya.
This article is reprinted with permission.Ingram and Frazier () examine the association between the content of corporate environmental disclosure and corporate environmental performance. This study focuses on lack of corporate social responsibility disclosures in annual reports due to their voluntary nature.
[email protected] Magazine is dedicated to telling the stories of ecological pioneers, products and systems that are driving an important change in corporate America. Scott J.
Callan and Janet M. Thomas, Executive compensation, corporate social responsibility, and corporate financial performance: a multi‐equation framework, Corporate Social Responsibility and Environmental Management, 18, 6, (), (). environmental responsibility, and greater empowerment for the nearly , diverse individuals who make UPS a global leader.
It’s about people who excel at logistics, master innovation, care about the.
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