Monday, July 27, 2009

What's the triple bottom line?

A recent McKinsey and Company survey revealed that nearly 85% of global CEOs and senior executives from 116 countries believe that business must take more responsibility for the public good and fostering a sustainable future. But a majority of those stated they weren’t sure what to do. Young Americans (18-25) have the same appetite to change the world. 80% want to work for companies that directly contribute to society and a similar amount want to do something in their community right now. But the vast majority says they don’t know how. Isn’t that true for most all of us? We want to change the future. We just aren’t sure how.

So corporate social responsibility or CSR is a relatively new and increasingly large concern for corporations and small businesses alike. CSR is also known as corporate citizenship, corporate responsibility, sustainable responsible business (SRB) and corporate social performance. Simply put, corporate social responsibility is self-regulation built into a company’s business plan so that it pursues the triple bottom line that’s good for profits, people and the planet.

In today’s competitive world, businesses need to leverage every differentiating advantage they can imagine. Business Week reports that “about 60 percent of consumers indicate that when they make purchase decisions they do take into account social and environmental factors.” Business Week went on to say, “The second point is that about a quarter of them (the 60 percent in the above statistic) don't feel they have a socially responsible alternative and if they did, they would switch brands.”

A socially responsible company proactively encourages community growth and development, as well as taking significant and meaningful strides to eliminate their negative effects on the community and world due to their business practices. Typical initiatives including recycling, telecommuting, low-income housing projects, green awards and many others, have all been part of one or another company’s pledge to act responsibly. In March of 2008, T-Mobile ran a campaign that pledged a new tree to be planted for every customer who switched to paperless billing. Companies like, McDonalds, Starbucks, Sony and many others have dedicated Web sites with information regarding their corporate social responsibility actions.

Coffee giant Starbucks is among the social responsibility leaders. A look at Starbucks’ global responsibility page reveals little content, but key CSR tools. First, Starbucks uses two elements of the triple bottom line, planet and people, to immediately let their customers know they care about being socially responsible. Next, Starbucks ingeniously created their CSR reports that, although extraordinarily long, can convince almost anyone that Starbucks truly does care for the environment.

Disney has created more than just an impressive CSR reporting Web site. Disney is leveraging its branded stars to communicate Disney’s message of social responsibility to even its younger audience. Teen idols Miley Cyrus and the Jonas Brothers are key celebrities of the “Friends for Change: Project Green.” Through Project Green, Disney is pledging up to a million dollars to be donated, invested and spent based on ideas from the teens that join and submit suggestions.

By acting responsibly with employees, communities, and consumers a company can make deposits to their piggy banks of positive brand sentiment. I hope to explore more of the whys and hows of CSR this week.


Jay Sea said...

Great to see this topic on here!

john cotter said...


Anonymous said...

Great article. Enjoyed it fully!