The Marketing Bureau

....By Budget Constraints and Cost Fears
by Cath Everett
First Published on www.mycustomer.com

Although corporate social responsibility activities can help to attract and retain customers and boost profitability, short-term budgetary constraints and cost fears are acting as a break on fulfilling objectives.

According to a survey among 400 global companies entitled 'Corporate Sustainability: a progress report' undertaken by management consultancy KPMG and the Economist Intelligence Unit, the main business driver for going down the CSR route was to try and boost brand reputation. Next on the list was a need to comply with regulatory requirements.

The biggest benefits gained from implementing such strategies, however, were attracting and retaining customers (32% of respondents), increased profitability (31.5%) and better quality products or services (25%).

But even though the majority of those questioned were eight in the process of developing a sustainability plan or already had one in place, short-term funding issues (40%) and the risk of increased costs when compared with rivals (36%) were the key inhibitors to further progress.

The situation was not helped by the fact that just over three quarters of organisations were unable to measure effectively how initiatives benefited their bottom line due to a lack of meaningful benchmarks.

Vincent Neate, KPMG’s head of climate change and sustainability, said: "In a tough economic climate, it is crucial that the progress that has been made in engaging the business community in sustainable practices is not stilted through lack of measurability."

But he pointed to task forces within the Global Reporting Initiative and International Integrated Reporting Committee, which are in the process of developing common measurement, benchmarking and technology exchange standards that should help to make financial links clearer.

About two thirds of those polled believed that the introduction of such standards were either ‘very important’ or ‘critical’ and there was also widespread support for the creation of tougher international regulations in order to reduce the complexity and cost of different national and state rules.