Corporate Social Responsibility (or CSR, for short) may have started decades ago as basic compliance with laws or as simply an attempt to avoid litigation. But in the 21st century, it's well on its way to becoming the next engine of growth for companies—if only they can figure out what their customers consider "responsible."
Put simply, CSR is the way that companies do good in the world, benefiting society through their own economic, environmental and social actions. A recent study by IBM's Institute for Business Value shows that corporate leaders are taking a fresh, strategic look at their companies' effects on the planet and society. But as yet, many may be flying blind. Over two-thirds of business leaders surveyed by IBM are focusing on CSR activities to create revenue streams, and nearly two-thirds believe they have sufficient information to satisfy customers' concerns.
However, less than a quarter of businesses actually understand their customers' CSR concerns well, and even fewer are asking them.
Despite this gap, business leaders who integrate CSR with overall strategies and operations can gain long-term results and clear business benefits. According to the Economist, "the simple solution is that businesses should concentrate on the sweet spot where initiatives are good for both profits and welfare."1 And executives are starting to agree: in this recent study of 250 business leaders, IBM found that over half of them believe their CSR activities are giving them an advantage over their top competitors.
