Ipsos - New Study Pinpoints What Consumers Want From Corporations

Consumers Worldwide Expect Businesses to Achieve Social as Well as Economic Goals New Study Pinpoints What Consumers Want From Corporations

NEW YORK, Sept. 30, 1999 -- Like citizens worldwide, American consumers say the role of business is to make profits and create jobs, but far more important over the next decade will be helping build a better society, according to the largest-ever global survey of public expectations of corporations.

In fact, Americans are among the most adamant about a broader role for companies. Only 11% of Americans think companies should focus only on making a profit, paying taxes, employing people and obeying all laws. Three times as many (35%) think they should also work to exceed lawful requirements, set higher ethical standards and help build a better society for all.

Most Americans (53%) think companies should operate somewhere between these points of view. Citizens of only two other countries (Australia and Canada) take a more aggressive stance on this issue.

The research was conducted as part of a global public opinion poll, Environics International's Millennium Poll on Corporate Social Responsibility. With the collaboration of The Prince of Wales Business Leaders Forum, London, and The Conference Board, New York, and with the support of corporate sponsors and subscribers, Environics International developed and coordinated a survey on these topics to representative samples of 1,000 citizens in each of 23 countries on 6 continents - more than 25,000 interviews conducted in May 1999. (See lists, appended, of countries and research institutes that fielded the survey in other countries.) The U.S. survey of 1,000 consumers was conducted by NFO Research of Greenwich, Connecticut.

The survey sponsors are PricewaterhouseCoopers, BP Amoco, and Bell Canada.

"Corporate social responsibility is fast becoming a global expectation that requires a comprehensive corporate response," said Doug Miller, President of Environics International Ltd., Toronto. "The findings from the Millennium Poll underline the importance of major companies having an active corporate function to address how they can help contribute to the social and environmental, as well as the economic agenda of the countries in which they operate."

Robert Davies, Chief Executive of The Prince of Wales Business Leaders Forum, said: "The Millennium Poll demonstrates clearly that public expectations of more responsible business practices are now firmly rooted around the world in the emerging markets as well as developed. Successful businesses in the 21st Century will increasingly need to respond by actions to demonstrate corporate citizenship in practice and consistent standards in all its markets."

"Consumers in the U.S. maintain that the most important goals for the country in the next 10 years will be social in nature," said David J. Vidal, Research Director of The Conference Board's Global Corporate Citizenship Program. "Among these social goals, providing health care and fighting disease, reducing crime, and lowering the incidence of violence and conflict are considered more important than economic growth or job creation. A majority of consumers think that companies, in addition to making a profit, should make a difference in society."

How consumers form impressions of a company

The U.S. research indicates consumers care more about brand quality and company image and reputation than they do about any other single factor when forming an impression of a company. Slightly more than 54% of Americans surveyed cite brand quality and image/reputation as very important with respect to corporations. However, an equal number mention the company's social performance - either its labor practices, business ethics, broader social role, or environmental impacts. Only 20% mention attributes related to business fundamentals like financial factors, size, business strategy or management.

Worldwide, 1 in 3 say they form impressions of a company based on business fundamentals such as financial factors, company size, business strategy or management; 4 in 10 mention brand quality or corporate image or reputation. A majority (almost 6 in 10) mention factors related to a company's broader responsibilities - labor practices, business ethics, responsibility to society at large, or environmental impacts.

Consumers' view of a company's role in society

Respondents were asked to define a company's role: "Focus on making a profit, paying taxes, and providing employment in ways that obey all laws," or "Do all this in ways that set higher ethical standards, going beyond what is required by law, and actively helping build a better society for all," or "Operate somewhere between these two points of view."

As mentioned earlier, half of U.S. consumers say firms need to manage a middle course between focusing on the profit mission alone plus demonstrating concern for ethical and social advancement. Another one-third supports an outright commitment to an ethical and socially accountable approach to fulfilling the corporate mission. Almost 90% agree large companies should do more than focus only on profitability.

One of the most powerful findings of the global survey reveals that majorities of citizens in all but three of the countries surveyed think companies should go beyond the minimum definition of their role in society. This is particularly strong in North America and Australia, and weakest in Russia, Turkey and Kazakhstan.

Interestingly, people in Kazakhstan, China, Nigeria and India are 3 to 4.5 times more likely than North Americans to believe that a company's role is simply to make profits, pay taxes, provide jobs and obey laws.

Areas that define companies' responsibilities

In the U.S., more than three-quarters of consumers hold companies totally or partially responsible for avoiding bribery or corruption; keeping operations and supply chains free of child labor; preventing discrimination; protecting worker health and safety; and not harming the environment.

Although Americans hold business accountable for its impact on the environment, workers and the workplace, they are skeptical that corporations will be a source of leadership for solving problems in these areas. Consumers see governments and non-governmental organizations as four times more likely to provide leadership on national goals than businesses.

A slight majority, 53% of U.S. consumers, agrees that companies are at least partially responsible for helping community charities and projects. However, half of those within this majority hold companies completely responsible.

Globally, while results vary by country, consumers hold companies most responsible for the same things Americans do: protecting employee health and safety, treating employees equally, not participating in bribery or corruption, environmental protection, and not using child labor.

Citizens worldwide rate these responsibilities higher than making profits and paying a fair share of tax. Applying high standards wherever they operate is also seen as a significant responsibility of large companies.

The poll shows that people worldwide pay attention to corporate social accountability issues. More than half of 25,000 surveyed have commented to others on such issues at least a few times in the past year. One in 5 people reports speaking "many times" in the past year with friends or family about companies' social behavior.

One in five consumers worldwide "reward" or "punish" companies

Nearly half of American consumers say their perception of a company led them to consider rewarding or punishing a company by purchasing or not purchasing its products or services, or by speaking up for or against an organization.

Large U.S., European, and Japanese firms were given a good to excellent grade by two-thirds or more of survey participants on social accountability. U.S. firms were graded poorly by one-quarter and Japanese firms by one-third of responding consumers.

Around the world, 40% of the 25,000 respondents have thought in the past year about punishing a specific company perceived as not socially responsible; half of them - 1 in 5 worldwide - have avoided the product of a company or spoken out to others against the company. Meanwhile, consumers were just as likely to "reward" a company perceived as socially responsible.

Some 20% of the global sample were deemed "opinion leaders" - people in leadership roles in organizations, or those who regularly speak in public and influence others' opinion. Compared to the general population, opinion leaders are twice as likely to talk about corporate behavior and significantly more likely in the past year to have punished a poorly perceived company.

Interestingly, the survey shows that employees of large companies are even more likely to be concerned and active in this area than the general population.

Defining corporate citizenship in the 21st Century

The strength and breadth of findings from this global survey suggests that major companies in the 21st Century will be expected to:

• Demonstrate commitment to society's values by actively contributing to social and environmental goals, as well as economic ones;
• Insulate society from negative impacts of the companies' operations, products, and services;
• Share the benefits of company activities with key stakeholders as well as with shareholders;
• Demonstrate that their company can "do well by doing good".

"The strength of the Millennium Poll findings, plus the early experiences of leading companies, suggest that in the coming decade corporate social responsibility is to become a new pillar of performance and accountability of successful companies," said Mr. Miller.

Environics International will track these and related trends annually through its Global Issues Monitor survey of more than 20 countries.

Media representatives are encouraged to contact the following corporate sponsors, each of which is committed to corporate social responsibility and supported this global research, enabling citizens around the world to make their views and expectations known.

Background: the collaborating organizations

Environics International Ltd. conducts regular public opinion and stakeholder research in over 30 countries on all continents, through license agreements with respected national research institutes. It specializes in the social, ethical, environmental and economic aspects of sustainable development. In addition to custom research assignments for global organizations, it offers a number of multi-client reports of its research on a subscription basis, including the Millennium Poll on Corporate Social Responsibility and the annual 25-nation International Environmental Monitor.

The Prince of Wales Business Leaders Forum, an international not-for-profit organization active in some 30 emerging and transition economies, has been promoting corporate social responsibility since 1990. Supported by 50 prominent corporations in Europe, America, Asia and the Middle East, the Forum works with leaders in business, civil society and the public sector to encourage responsible business practices and cross-sector partnerships with an emphasis on social, economic and environmental issues.

The Conference Board is the world's leading business membership and research organization, con-necting senior executives from more than 2,900 enterprises in over 60 nations, involving over 13,000 executives through worldwide conferences, councils and meetings. A not-for-profit, non-advocacy organization, the Conference Board produces the Consumer Confidence Index & Leading Economic Indicators as well as a wide range of reports on best business practices and economic and public policy issues.