Our Analysis:
We hear a lot from companies about being good corporate citizens and helping their communities. It makes for good PR, and when done right, it can create tight bonds with employees, their families and world at large.
But what impact does a brand’s reputation have on growth?
Does a company held in high regard by consumers for its corporate citizenship perform better in the market? We asked ourselves if companies that are committed to making the world a better place through environmental, social and governance policies have an advantage because there is a built-in level of trust and respect that comes with their reputation.
As a proxy for reputation we took the top 100 “green” companies as ranked by a comprehensive 2011 Newsweek study and compared their cumulative revenue growth from 2005 - 2010 against the cumulative revenue growth of the S&P 500 for the same period. The results show a substantial performance advantage of 13.7% higher growth for those companies deemed best in class for social responsibility.
The same study also ranked the 25 least green companies in the S&P 500 and when we compared their growth it is much closer to the overall average. At least by this measure there doesn’t seem to be an advantage in avoiding investment in social and environmental programs. While clearly there are many other factors at play here it’s important to note that all but 7 of the companies in the Newsweek study are in the S&P 500 themselves so they are being measured against their peers.
Given that a large number of these companies are also Eloqua customers our next step is to compare their marketing effectiveness against the Eloqua Benchmark Index. Does a positive brand image help companies achieve higher open and click-through rates?
How important to you is a company’s social responsibility track record?
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