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by Alan Tyrrell
May 2007
A survey of Irish companies on their approach to corporate social responsibility shows that almost 70 percent of respondents are already investing in CSR, with 40 percent spending more now than two years ago. However, the results also show that CSR is among the most vulnerable items when financial cutbacks are required, and respondents could show little evidence of a direct link between CSR and increased profitability.
The survey of almost 150 Irish companies was undertaken to provide a benchmark on CSR attitudes and behaviors in Ireland and was focused on finance and accounting executives in Irish business. While the results are mainly positive, there are also some strong contradictions in attitudes toward CSR and its interplay with business practice, corporate strategy and profitability.
What is CSR in practice?
In order to develop a deeper understanding of how respondents define CSR, they were asked to distinguish between CSR and standard business practice for a series of items.
What CSR is:
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92% of respondents stated that supporting charities is CSR |
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83% of respondents categorize activities to help solve social problems like crime and poverty as CSR |
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77% of respondents said that CSR means exceeding legal or regulatory obligations in areas of business operation such as health and safety and consumer rights. This result shows that most respondents have moved beyond a legal compliance model of business practice and toward full engagement with proactive standard setting. |
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66% stated that managing the supply chain to ensure that suppliers respect human rights is CSR |
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62% identified CSR as taking measures to ensure that products do not harm the environment |
What CSR is not:
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87% of respondents said protecting health and safety of employees is standard business practice |
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Making website and sales literature customer friendly is seen as standard business practice by 79%, compared to 16% who see this as CSR action |
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70% see the provision of transparent product information as standard business practice |
Interestingly 25 percent state that ensuring the company does not engage in bribery is CSR rather than standard business practice. Given that the sample was drawn predominantly from accountants it is equally interesting that 10 percent of respondents state that accurate management and reporting of company finances is an act of CSR as opposed to standard business practice. One wonders what businesses this minority operate in!
Communicating CSR
When asked about communicating CSR, 56 percent of respondents agreed that many companies do a great deal more for their communities than is talked about or known, and 40 percent of respondents stated they had received positive media coverage of their CSR actions in the past two years. Just 22 percent of respondents stated that they formally communicated CSR actions to investors.
Contradictory views
Apparent throughout the results were seemingly contradictory views on the interplay between CSR and business. For instance:
- While 78 percent agreed that businesses generally do not pay enough attention to their social responsibilities, 65 percent of respondents stated that CSR needs to be a priority.
- Eighty percent stated it was important for companies to expend resources to improve the communities in which they operate. However, 66 percent stated that many companies promote CSR but are not truly committed to it. When presented with a series of priorities to choose from, the largest group (36 percent) selected "balancing the demands of all stakeholders" as the most important priority for a business.
- Dealing with the links between profitability and CSR the results also showed some contradictions. For example, 56 percent agreed with the statement that ‘CSR makes a tangible contribution to profitability’. Yet only 12 percent said their company’s CSR actions over the past two years had led to increased profitability.
About the survey
This research and analysis was undertaken and completed by Alan Tyrrell with the assistance of Accountancy Ireland, the official magazine of the Institute of Chartered Accountants Ireland (ICAI). Tyrrell is a Group Media Relations Manager for Hibernian Insurance, one of Ireland’s largest and most successful financial organizations. He can be contacted via e-mail at alan.tyrrell@hibernian.ie.
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