Where’s the proof that CSR is profitable?

Photo by Anna Nekrashevich from Pexel

It’s no secret that businesses are primarily motivated by money. Virtually every corporate decision is strongly influenced, if not fully determined, by a financial cost-benefit analysis. Until recently, most business leaders assumed that corporate social responsibility (CSR) was an expense that had no financial upside. Yet, as covered in a prior post, studies have established that CSR drives higher employee attraction, retention and engagement - all of which help the bottom line. Furthermore, another post on this site linked CSR to customer spend and loyalty. If all of this is true, CSR would be expected to lead to better financial performance. Is there evidence that it does?
There is! A 2020 study involving over 250 European companies, for example, concluded that “companies pursuing CSR policies financially outperform their peers.” What’s more, this positive impact holds up even during periods of economic crisis. Similarly, 2019 research conducted out of the University of Chicago discovered that a $1,000,000 investment in CSR will likely be pay off for companies with as few as 411 employees. Put another way, it appears that investing $2,400 per employee in CSR is profitable! Furthermore, a 2016 study found that CSR is linked to lower investment risk and higher stock returns.

It’s no wonder, then, that many leading brands - including Deloitte, S&P Global and UPS - pursue meaningful CSR. CSR seems to the new secret sauce for financial success. To make the business case for your company’s CSR, download “Making the Case for Socially Responsible Business” by ACCP or contact us!