I created a brief presentation to summarize some research we compiled on the business value of certain dimensions of CSR - Diversity, Community Investment, and Volunteering.
3. Hypothesis:
Business value is easier to “prove” in
some CSR domains than others.
We need “proof points” for inclusion,
volunteering, and community
investment that can help change the
conversation.
Create a repository of useful some
academic and industry research
3
Purpose & Objectives
Provide high-level guidance on
organizational strategy or best
practices
Build a list of case studies for
competitor analysis
7. CSR (especially volunteering) improves employee engagement
‘Community investment’ helps employee engagement and
community relations generally
Diversity and inclusion improves productivity and engagement
Outline
8. Engagement
Matters
8
Employee engagement is the extent to which employees
commit to something or someone in their organization
and how hard they work and how long they stay as a
result of that commitment.
Source: Corporate Executive Board
9. Engagement
Matters
9
Higher 12-month change in net income (14% vs -4%)
[Source: Towers Perrin]
Higher 12-month growth in earnings per share of company stock
(28% vs -11%)
[Source: Towers Perrin]
Profits grew 3 times faster
[World Business Council for Sustainable Development]
12. Room to
Improve
12
The level of engagement has remained stagnant since 2010
[Source: Conference Board of Canada]
Only 27% of employees are highly engaged
[Source: Conference Board of Canada]
But… Overall North American engagement is higher than
international levels, at 29% vs 14%
[Source: Gallup]
13. Room to
Improve
13
More than half of employees (51%) are searching for new jobs or
watching for openings
[Source: Gallup State of the Workforce Report]
Disengaged employees cost the country (USA) somewhere between
$450 and $550 billion each year.
[Source: Gallup]
14. Employee engagement matters
‘Community investment’ helps employee engagement and
community relations generally
Diversity and inclusion improves productivity and engagement
Outline
15. Benefits to
Engagement
15
Workers who were informed about a CSR program were willing to
accept a lower wage and were more likely to go “above and beyond”
for the employer by doing extra work not required for payment.
[Source: "Can Firms Pay Less and Get More...By Doing Good?“, academic study, Burbano 2014]
Half of workers in the UK said they were more likely to stay with an
employer that allows its workforce to donate time, and one in ten
said they would take a significant pay cut.
[Source: “Allow staff time off for charity”, The Guardian, April 2011]
17. Case Studies
17
AstraZeneca used skills-based volunteering as an opportunity to
enhance leadership capabilities among employees by giving people
opportunities to step out of their traditional roles at work
[Source: AstraZeneca Case Study, “The Business Case for Pro Bono
and Skills Based Volunteering”]
2,800 IBM employees participated in volunteer programs, and 76
percent said the program boosted their desire to complete their
careers at IBM.
[Source: “The Purpose Driven Professional”, Deloitte University Press]
18. The Bottom
Line
18
For every employee who participates in a volunteer program, more
than $2400 of value is generated… by decreasing turnover costs and
improving employee performance.
[Source: Corporate Executive Board Company (CEB): Maximizing the effectiveness
of volunteer programs]]
84% of executives at large companies see direct bottom-line benefits
from ESV programs.
[Source: Boston College, “The state of corporate citizenship”]]
19. Employee engagement matters
CSR (especially volunteering) improves employee engagement
Diversity and inclusion improves productivity and engagement
Outline
21. Business
Metrics
21
We define social investment (SI) as the voluntary contributions
companies make to support the well-being of communities,
individuals, and/or environmental systems.
When done well, SI has the potential to generate financial returns
that include: up to a 6% boost in share price; a 20% increase in sales;
a 13% jump in productivity; a 50% decrease in employee turnover;
and a boost to reputation worth up to 11% of a company’s market
cap.
[Source: “Business ROI of Social Investments”, IO Sustainability LLC]
22. Employees and
Investment
22
Social incentives lead to a 13% rise in productivity, regardless of their
form (lump sum or related to performance) or strength. The response
is strong for subjects with low initial productivity (30%), while high-
productivity subjects do not respond.
[Source: : “Corporate Philanthropy and Productivity”, Mirco Tonin and Michael Vlassopoulos]
23. Business
Metrics
23
With strong corporate responsibility and community investment
programs in place:
• Sales revenue can increase up to 20%
• Every $1 in corporate philanthropic contributions can generate $6
in increased sales revenue.
[Source: Is doing good good for you? How corporate charitable contributions enhance revenue
growth. Strategic Management Journal, 31(2): 182-200.]
24. Business
Metrics
24
We define social investment (SI) as the voluntary contributions
companies make to support the well-being of communities,
individuals, and/or environmental systems.
When done well, SI has the potential to generate financial returns
that include: up to a 6% boost in share price; a 20% increase in sales;
a 13% jump in productivity; a 50% decrease in employee turnover;
and a boost to reputation worth up to 11% of a company’s market
cap.
[Source: “Business ROI of Social Investments”, IO Sustainability LLC]
25. Employee engagement matters
CSR (especially volunteering) improves employee engagement
‘Community investment’ helps employee engagement and
community relations generally
Diversity and inclusion improves productivity
and engagement
Outline
26. Benefits of
Inclusion
26
Companies in the top quartile for racial and ethnic diversity are 35
percent more likely to have financial returns above their respective
national industry medians.
[Source: Diversity Matters – McKinsey, 2015]
In the United States, there is a linear relationship between racial and
ethnic diversity and better financial performance: for every 10 percent
increase in racial and ethnic diversity on the senior-executive team,
earnings before interest and taxes (EBIT) rise 0.8 percent.
[Source: Diversity Matters – McKinsey, 2015]
27. Benefits of
Inclusion
27
Cognitively diverse teams solve problems faster and more effectively.
[Source: Harvard business review, 2017]
Yet… 38% of decision making is estimated to be made by all-male
teams.
[Source: Diversity Matters – McKinsey, 2015]
“IFC” is the international finance corporation (part of the world bank group)
The define “strategic investment” as “voluntary actions in their area of operation that address development priorities and support business objectives. The report was focused on engaging in developing countries but holds true for all countries/areas of operation.
IO Sustainability, LLC (IO) is an international research and management consulting firm that helps clients connect the dots between their environmental, social, and governance performance and long-term value.
Their approach started by convening a cross-industry cohort of leading companies. These companies included:
ArcelorMittal
BD
Kellogg Company
KPMG
Novo Nordisk
Southwest Airlines
Symantec
WWE
“Done well” meant:
Companies that commit to SI approaches that are aligned to a company’s business strategy, and genuinely aim to generate positive impacts on community well-being stand the best chance of delivering financial and business value.
IO Sustainability, LLC (IO) is an international research and management consulting firm that helps clients connect the dots between their environmental, social, and governance performance and long-term value.
Their approach started by convening a cross-industry cohort of leading companies. These companies included:
ArcelorMittal
BD
Kellogg Company
KPMG
Novo Nordisk
Southwest Airlines
Symantec
WWE
“Done well” meant:
Companies that commit to SI approaches that are aligned to a company’s business strategy, and genuinely aim to generate positive impacts on community well-being stand the best chance of delivering financial and business value.
