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September 21, 2009

The Economics of Doing Good

Ts_inner_doinggood_090921Panelist Blake Mycoskie, CEO of TOMS Shoes

by Kathryn Maier

In the keynote panel of the 2009 World Savers Congress, moderator Nicholas Kristof of the New York Times posed a question to the panelists: How is the current economic climate affecting businesses' commitment to social responsibility?

The consensus of the panelists was that a commitment to corporate social responsibility makes good business sense --reflected both in profits and in consumer and employee loyalty. 

Goldman Sachs had committed $100 million over five years to its 10,000 Women program, which provides basic business-management education to underserved women, immediately before the economic downturn.  Not only has the firm sustained its commitment, it is also looking at how the commitment can be expanded, according to Dina Powell, Global Head of Corporate Engagement at the firm.  

People want to work for institutions that really are making an impact, she said.

The program has shown results, such as a 44 percent increase in sales among the program's first graduates in Rwanda.

Rachel Webber, Director of Energy Initiatives at News Corporation, agrees with Powell that the ability to show and communicate results is crucial.  Her company's efforts are geared most to minimizing its carbon output.  To say each DVD her company produces generates 1.12 pounds of CO2 may not mean much to a CFO, she said, but these facts can often be translated into dollars, and a case to reduce carbon output can be made that way.  Results can also be seen through consumer support -- for instance, the day that The Sun newspaper gave away an energy-efficient lightbulb with each issue, she said, the paper saw a 400,000 bump in circulation. 

Blake Mycoskie, CEO of TOMS Shoes, has seen a similar response from his customers.  For each pair of TOMS Shoes purchased, his company gives away a pair to someone in need.  His business has seen double-digit growth even in the past year, which he attributes to the philanthropic aspect of his business. 

People are buying less, but are focusing their purchases on things they can emotionally connect to, and that has played in our favor, he said. 

A common challenge that all panelists faced was figuring out the right targets--whether choosing the particular communities as recipients of their philanthropic efforts, or determining a set of sustainability goals for each specific department within the company; all admitted to having had to adjust their targets as they refined their CSR initiatives.  Even so, all agreed that even in this challenging economic environment, their companies would be furthering their commitment to corporate social responsibility.

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