Responsibility can boost firms' performance

Good corporate behaviour is of growing importance for consumers, writes Gabrielle Monaghan.

Good corporate behaviour is of growing importance for consumers, writes Gabrielle Monaghan.

Does your company get involved in its local community, look after its employees well and take measures to be kind to the environment? Even if this is the case, chances are your customers are not aware of it and the company is missing out on a business opportunity, a new survey indicates.

Almost 80 per cent of Irish people are unable to name a single company they consider to be a good performer both socially and environmentally, the results of a survey on consumer attitudes towards corporate responsibility reveal. The poll was carried out by Ipsos/Mori for Business in the Community Ireland.

More than eight out of 10 Irish consumers now believe a company's commitment to social responsibility is important when they're choosing a product or service - an increase of 10 per cent from 2003, when the last poll was conducted. The latest survey shows that the Irish public are not just interested in a company's financial performance, but their behaviour.

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Customer service, being open and honest, and product quality are the factors considered most important when consumers are judging a company.

"It is only when individuals are in possession of knowledge about responsible business practice that they can differentiate between one company and another. Companies that go the extra mile will then be chosen over those whose efforts remain unseen," according to Business in the Community, a non-profit organisation that helps companies improve their impact on the workplace, community and environment.

Despite a number of leading companies publicising examples of how they excel in customer service, treat their employees well and take part in their local community, the message is not reaching the Irish public.

Companies that regularly communicate the difference they are making to their customers, employers and suppliers can gain a competitive advantage over rivals, Business in the Community says.

The survey showed that 75 per cent of consumers in Ireland consider customer service important to them when making a judgment about a company, while 50 per cent agree that the Government should legislate to compel public companies to issue a social and environmental report, similar to the financial reports currently published.

Companies that are seen to be more responsive to the views of customers, investors and employees can unlock potential for value creation, innovation, growth, risk avoidance and an enhanced reputation, according to Business in the Community. This way, corporate responsibility becomes a driver for improving business performance, drawing attention to the leaders in the field and increasing profit share while contributing to sustainable development.

Permanent TSB won more customers after launching the world's first pre-paid disposable credit card to help the estimated two-thirds of the adult population who did not own a credit card. Without a credit card, these people were excluded from shopping online, over the telephone and by mail order. The card enabled the bank to set up a customer relationship where none had existed before and did not require a customer to open or to hold a bank account. "This raised the possibility of cross-selling opportunities to these new customers," said Permanent TSB.

One company that set out to contribute to its local community is Vodafone Ireland. The mobile phone operator teamed up with the Irish Blood Transfusion Service (IBTS) to encourage registered donors to give blood through a free text message reminder service. A total 500,000 texts have been sent to donors so far, helping the IBTS meet its goal of achieving 3,000 blood donations a week.

"In the last two years, the Irish Blood Transfusion Service was at risk of losing 18,000 donors, largely as a result of increased screening procedures to minimise the risk of variant CJD transmission through blood transfusions. The advent of the Vodafone text messaging service has been an invaluable tool in maintaining donation rates and safeguarding the national blood supply," said Paddy Bowler, operations director at IBTS.

Vodafone also encouraged its employees to donate at the IBTS's mobile blood clinic at the mobile company's Irish headquarters in Leopardstown. In addition, it helped fund the IBTS' marketing campaign to raise awareness of the need to give blood.

Other examples of corporate social contributions will be debated at length at a conference, Exchanging For The Better, at the IFSC on May 11th. The conference will be moderated by Prime Time presenter Mark Little and will be attended by President Mary McAleese.