Corporate social responsibility remains tough to measure

Summary:One-third of companies in a recent best practices survey report that they can measure the compact of social responsibility on profit.

Almost three-quarters of companies support a formal corporate responsibility program, up from slightly less than two-thirds in 2010.

Even more striking, perhaps, is that a much larger percentage of businesses have actually appointed an executive to be accountable for this function along with a budget to support it, according to the data just published by Corporate Responsibility magazine.

The magazine reports that 62 percent of businesses now have a corporate responsibility officer on the payroll, compared with just 42 percent of those surveyed in 2010. As far as budgets go, approximately 62 percent of organizations now have some dedicated corporate responsibility funds -- although more than half of companies put less than $500,000 annually into this function.

The data and corresponding report, "Corporate Responsibility Best Practices," was based on surveys sent to companies listed on the NYSE Euronext Indices and the Corporate Responsibility Magazine database. There were 300 responses from companies of all different sizes; about half of the responses came from companies with at least $1 billion in annual revenue. Approximately 80 percent of the responding companies were based in North America.

The data is another illustration of the growing interest in social responsibility and community programs across corporate management. Although 20 percent of the companies surveyed have no corporate responsibility program whatsoever, CEO-level and board-level interest in this area continues to grow, according to the data.

The biggest impediment, perhaps, to broader implementation of corporate social responsibility is the fact that is notoriously tough to measure the impact. Of the surveyed companies supporting a program, the top two perceived benefits came in improved customer satisfaction and the ability to attract and retain talent.

Yet, only 35 percent of the companies with a corporate social responsibility function say they can directly measure the impact of that program on profitability.

That is a depressingly low number and it is certainly one of the reasons that corporate social responsibility still hasn't become ubiquitous. You can bet if there was a direct link to profitability metrics or on shareholder value, more businesses would sit up and pay attention. As the economy turns in 2012, should be interesting to watch how the mood with respect to corporate social responsibility evolves.

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This post was originally published on Smartplanet.com

Topics: Innovation

About

Heather Clancy is an award-winning business journalist specializing in transformative technology and innovation. Her articles have appeared in Entrepreneur, Fortune Small Business, The International Herald Tribune and The New York Times. In a past corporate life, Heather was editor of Computer Reseller News. She started her journalism lif... Full Bio

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