The Business Case for CSR

A final note for the day – contrary to the conventional wisdom that it costs more to be responsible than it is worth: the fact is, the exact opposite is true. Responsible companies on average outperform their less responsible peers by up to 25%.

The Morgan Stanley Capital International World Index of 602 companies found that the 186 highest-ranked companies outperformed the remaining 416 companies by 23.4 percent between January 2000 and October 2003.

Lynn Sharpe Pains, a Harvard Business Professor and author of Value Shift, reviewed 95 academic studies for the relationship between corporate financial and social performance. Although there is much to question about these studies, it is worth noting that only 4 of the 95 studies found a negative relationship between social and financial performance, and fifty-five studies found a positive correlation between better financial performance and better social performance.