It Pays To Be Green: Corporate Social Responsibility Meets the Bottom Line

It Pays To Be Green: Corporate Social Responsibility Meets the Bottom Line

Turn the light off when you leave a room. Recycle rather than throw away. Volunteer or donate to worthy causes. Think about the daily contributions you can make to reduce your carbon footprint and contribute to a better planet. Today, it’s widely regarded as everyone’s responsibility to protect the environment and give back socially. And consumers increasingly think that corporations are no exception.

Corporate social responsibility, also referred to as corporate citizenship or conscious capitalism, is practiced by companies dedicated to making a positive social or environmental impact on society. More and more, consumers expect companies to do one or the other, if not both.

But do consumers really care about conscious capitalism when it comes to buying decisions? Are they willing to pay more for products and services that come from companies that engage in actions that further some social good? Assuming a positive ratio between a stated willingness to pay and an actual willingness to open one’s wallet, Nielsen’s global survey on corporate social responsibility found that the answer is yes for a growing number of consumers around the world.

More than half (55%) of global respondents in the survey said they are willing to pay extra for products and services from companies that are committed to positive social and environmental impact—an increase from 50 percent in 2012 and 45 percent in 2011. Regionally, respondents in Asia-Pacific (64%), Latin America (63%) and Middle East/Africa (63%) exceed the global average and have increased 9, 13 and 10 percentage points, respectively, since 2011. While a willingness to pay extra for sustainable products is comparatively lower in North America (42%) and Europe (40%), both regions show an increase in purchasing sentiment from 2011, rising 7 and 8 percentage points, respectively.

The survey reported similar responses for stated past purchases of sustainable products. More than half of global respondents (52%) say they have purchased at least one product or service in the past six months from a socially responsible company, and respondents in Latin America (65%), Asia-Pacific (59%) and Middle East/Africa (59%) exceeded the global average. Four in 10 respondents in North America and Europe say they have made a sustainable purchase in the past six months.

To determine if actual retail performance supported these sentiments, we reviewed retail sales data for a cross-section of both consumable and non-consumable categories in nine countries. These brands included either sustainability claims on packaging or actively-promoted sustainability actions through marketing efforts. The results from a March 2014 year-over-year analysis show an average annual sales increase of 2 percent for products with sustainability claims on the packaging and a rise of 5 percent for products that promoted sustainability actions through marketing programs. A review of different brands without sustainability claims or marketing shows a sales rise of only 1 percent.

“At the moment of truth—in store, online and elsewhere—consumers are making a choice and a choice that is heavily influenced by brands with a social purpose,” said Amy Fenton, global leader of public development and sustainability, Nielsen. “This behavior is on the rise and we are seeing this manifest into positive impact in our communities as well as share growth for brands.”

The latest corporate social responsibility report also includes:

  • A generational look at the consumers who care about corporate social responsibility.
  • A five-part approach for how to succeed at sustainability through brand strategies.
  • A review of the causes that most resonate with consumers.

For more detail and insight, download Nielsen’s Global Corporate Social Responsibility Report.

About the Nielsen Global Survey

The Nielsen Global Survey of Corporate Social Responsibility was conducted between Feb. 17 and March 7, 2014, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users, and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 percent. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.