Do the Right Thing: Corporate Social Responsibility
July 07, 2008
REI, Patagonia and Pitney Bowes show that social and
environmental responsibility bring plenty of rewards
By Alex Palmer and Leo Jakobson
Corporations as a group don't have a very good reputation these days: Enron and Tyco executives were sentenced to jail, oil companies are under fire for reporting record profits as gas prices break household budgets around the country and just last month, two Bear Sterns hedge fund managers were arrested—the first major criminal case to arise from the subprime mortgage meltdown that has cost hundreds of thousands of Americans their homes.
In this atmosphere, a reputation as a good corporate citizen—as an ethically, socially and environmentally responsible company—is no luxury. It is a message that says, "Here is a company you can trust to do business with, work for and buy from." That's not an easy reputation to win, just as a bad reputation is hard to shake: Look at the term "green washing," which recently entered the national lexicon to describe companies that suddenly talk about being environmentally friendly after a long history of polluting and wasting resources.
More and more, a reputation for corporate social responsibility is vital to doing business.
For one thing, the newest generation in the workforce, millennials, have made clear that their loyalty requires corporate social responsibility, most famously in a 2005 study by the Boston College Center for Corporate Citizenship, which surveyed top MBA students and found 94 percent said they would accept a lower salary to work for a socially responsible company. But even more than that, consumers of all ages are beginning to demand it, to associate brands with either good or bad citizenship, and to shop accordingly.
This month, Incentive looks at three companies that "get it"—and have gotten it since well before consumers, prospective employees and investors cared. If there is one thing that became clear in writing these stories, it is that the commitment must be sincere and come from the top down. Once it does, the bottom will follow.
In our first two case studies, Managing Editor Alex Palmer looks at a pair of outdoor clothing and equipment companies: REI and Patagonia. Both were founded by entrepreneurs with a strong interest in the environment, and both target environmentally active employees and consumers for whom the outdoors are a way of life, and who are willing to support that with their loyalty. In the final study, Senior Editor Leo Jakobson delves into Pitney Bowes, an 88-year-old multinational specializing in document management services, with ethical behavior among the principles that make it as strong a company as it is.
REI's Corporate Stewardship
It makes sense that both Recreation Equipment, Inc. (REI) and Patagonia approach their environmental work not as charity, but as investments.
Patagonia Reconnects with its Roots
Social and environmental responsibility is in the DNA of Patagonia.
Pitney Bowes' Pride
At Pitney Bowes, pride is considered a strategic asset.
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