Social responsibility becoming pivotal to business success

Posted by Daniel Palmer on 7th August 2008

Green Earth

Good corporate citizenship reflected by ethical labour, environmental and social practices cannot be ignored by companies looking to differentiate themselves in a competitive market, according to a new survey conducted by TNS Canadian Facts.

A key factor in the success of a business over the long term is the trust that is built between the company and consumers. Businesses that breach that trust can often suffer the consequences. In fact, about half of Canadians (49 per cent) say that they are very likely to refuse to buy a product from a company based on hearing negative news about the organization.

The TNS survey found that, among the factors that go into building trust, a company’s reputation is almost as important as other, more tangible product and service characteristics, such as price, value and customer service.

“Companies are increasingly going to be held accountable not only for the quality and price of their products and services, but also for the corporate citizenship and environmental stewardship of their business as a whole, as these are key components of a company’s reputation,” said Richard Jenkins, Vice-President of TNS Canadian Facts.

The survey points to the emergence of a new consumer attitude around corporate accountability and social responsibility that may transform the market. This new consumer attitude is reflected in the way in which a core group of consumers is making choices. For example, over the past six months, one-third of Canadians say they have recommended a green product to someone they know and 28 per cent have refused to purchase a product from a company that they believe has a poor reputation.

“While consumers are rarely willing to reward good corporate citizens by paying a premium for their products and services, companies that practise social responsibility and good corporate citizenship clearly offer a positive point of differentiation in an increasingly fragmented market,” added Mr Jenkins.

*The TNS study called “Ethics: reporting on social responsibility in Canada” is part of a new public affairs series of online polls. The nationally representative internet survey of 1,539 online Canadians 18 years and older was conducted between June 5 and 16, 2008.