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June 06, 2002
New Report Assesses the Status of Corporate Social Responsibility
    by William Baue

Echo Research reports on how corporate social responsibility is increasingly important for global corporations, and rates how CSR is being incorporated into business practices.


What role does the practice and communication of corporate social responsibility (CSR) play in creating value for a company? Echo Research, an international reputation analysis firm, attempted to answer this question in its second annual report on CSR entitled Giving Back 2. The report includes the CSR Perception Index, which rates the companies that best incorporate CSR into their business practices. In addition, Echo reports on corporate attitudes regarding the utility of CSR, as well as on media depictions of CSR.

"In a year when September 11, the collapse of Enron, and the expansion of the UN Global Compact all provoked global business and political leaders to put CSR top of mind, our research shows increased effort to manage CSR effectively and a greater and more positive profile in the media as a result," said Echo CEO Sandra Macleod.

With regard to incorporating CSR into business practices, Ford (ticker: F) and BP (BP) topped Echo's CSR Perception Index for the second year in a row. IBM (IBM) and GlaxoSmithKline (GLX) rounded out the top four this year. Echo applauded Ford's "Time Budget" program, which encourages employees to advance CSR initiatives, and BP's integration of social reporting into its business model. IBM earned high ranking due to its promotion of education, while GlaxoSmithKline distinguished itself as the most prominent CSR practitioner in the pharmaceutical industry.

The report predicted that "ethical investment," another term for socially responsible investment (SRI), will benefit significantly from the rise of CSR. One barometer of this upward trend is the increasing media coverage of ethical investment, which rose by 92 percent on a yearly basis between the beginning of 2000 and the beginning of 2002.

The media increased its coverage of CSR by 52 percent over 2001 and 2002, as compared to the previous year, according to the report. Echo expressed surprise that this media coverage, which focused on the social and environmental impact of CSR, tended to be positive. This counterbalanced the corporate perception reported in the study that media coverage of CSR tends to be negative. However, more than 80 percent of companies' CSR decision-makers believe in the ability of CSR initiatives to enhance corporate reputation as well as attract, retain, and motivate employees.

Echo conducted research throughout the past year in compiling the report. Analysts pored over more than 1,000 media items from the six focal countries of China, France, Germany, South Africa, the United Kingdom, and the United States. They also conducted 200 telephone interviews with senior corporate CSR decision-makers, and surveyed members of the UK Institute of Public Relations via the Internet. Finally, at the November 2001 International Communications Consultancy Organisation (ICCO) Conference in San Francisco, Echo surveyed the CEOs of public relations agencies and the heads of PR associations.

Looking toward the future, the report stressed the importance of developing definable measurements and benchmarks for assessing the impact of CSR on business success. Echo listed several other issues that may impact the future development CSR: the debate on sustainable development at the Rio + 10 Earth Summit; the possible resurgence of the anti-capitalism movement in the wake of the events of September 11; the implications of Enron's poor corporate governance; and the continued growth of ethical investment.

 

 
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