Research Briefs

Focusing on sustainability in procurement creates a competitive advantage for companies.

When consumers perceive a company’s corporate citizenship efforts to be robust and focused on stakeholder well-being, instead of just company well-being, they are more likely to view a company’s product positively and use the product more.

For firms engaged in environmental reporting, it is important to be aware of how your context and performance may influence your inclination to disclose. Depending on a variety of factors, firms may be more inclined to exaggerate—or in some cases under report—emissions reductions. Being aware of these tendencies may help reporters guard against these tendencies and produce more accurate reports.

Differentiating a product by its corporate citizenship attributes can improve export performance.

Analysts and investors are increasingly interested in firms’ environmental performance to determine how well they manage exposure to environmental risk, and rely on transparent corporate citizenship reporting to make their assessments. This research finds that the market penalizes firms for increases in carbon emissions, yet, on the whole, values companies that proactively disclose carbon emissions more highly.

Investment in corporate citizenship delivers value when the investment is aligned with local market and headquarters country expectations. A framework can customize strategies for a variety of contexts.

Pressures from stakeholders can encourage firms to invest moderately or deeply in the social dimensions of corporate citizenship. However, the highly technical and costly aspects of environmental investments can lead firms to take an “all or nothing” approach over time, avoiding the middle ground. For firms that go “all in” on environmental programs, economic and competitive opportunities can be significant.

When stakeholders become visibly engaged with corporate actions or policy decisions, peer organizations observe and adjust their responses to corporate citizenship issues.

In communicating and framing corporate citizenship efforts in countries beyond their headquarters, firms should highlight do-good rather than do-no-harm corporate citizenship initiatives to gain the most positive evaluation from stakeholders.

Signing petitions, “liking” a post or joining a Facebook page, and wearing pins/ribbons are popular, token ways to indicate support for a cause or program. In order to build on that initial act of support and encourage deeper and more meaningful commitment to the cause, marketers and citizenship managers should focus on those supporters who are willing to privately participate in token acts for more meaningful engagement.

Some boards may be better positioned to navigate complex environmental issues and prioritize the long-term benefits of environmental performance. Firms with larger, more independent boards comprised of directors that have specialized knowledge of potential environmental impacts (CEOs of other companies, lawyers) have better environmental performance.

Firms with high levels of employee satisfaction—measured by inclusion on the annual "100 Best Companies to Work For in America" list—generate higher long-term stock returns. This signals that intangible assets, such as employee satisfaction, are not immediately recognized by the market, but lead to increased firm value over time.