Verizon and Campbell Soup Company launched the ROI Project in order to improve the measuring of the performance of sustainability management and to properly measure the benefits companies gain from environmental, social and governance programs. The study confirms that a properly designed CRP produces an increase on sales, on the stockholder’s value and improves workers’ productivity.

The goal of the project is to evaluate the business case of Corporate Responsibility for the benefit of executive directors, management councils and even Wall Street.

The research wonders the potential of the return over investments of Corporate Responsibility actions and has evaluated:

• What are the strategies, tactics and practices that may create the ROI?
• What are the lessons executives must take in order to measure CR practices?

The research tends to focus mostly on the experience of large companies that are listed in the stock Exchange. It is rather easy to measure the relationship between CR and financial performance in these companies, as they have transparent financial results.

Even though the research is focused on business cases, it is important to highlight a key finding:

Companies that are committed with CR approaches and that genuinely and truly seek to optimize their impact and produce positive benefits for society, have better chances of generating financial value for the business.

Large companies listed in stock exchanges that implement efficient approaches of CR have the potential of achieving the following performances in investments:

The entire CSR’s profile improves the market’s performance in the following way:

• Companies that implement CR have the potential of leading other companies up to a 4%-6%.

A particular good CR practice improves the market’s performance the following way:

• Between 2004-2007, leading companies in carbon reduction surpassed other companies on 3%, with an accumulated total return of 81.85% compared to 72.67%
• Investors appreciate mining companies that have strong relationships with shareholders between 46% and 86% more than companies with medium or weak relationships.
• Effective philanthropy actions are correlated to higher market values.

The report shows results of risks and costs’ reductions, as well as of ROI in sales, reputation, human resources and operational strategies in cases of study such as IBM and Unilever. Finally it introduces tactics and strategies to generate value in CR.

Source: ComunicaRSE