Opinion leaders survey

Consumer opinion survey

Company ratings

Relationship with marketing effectiveness

How Smorgon Steel makes money by doing good

Implementation

Opinions of business leaders towards the concept of corporate social responsibility (CSR) are polarized.

Responses to the tragic Boxing Day 2004 tsunami illustrate this polarization well.  Initially, the Australian Shareholders Association spokesman, Stephen Matthews said firms should not donate without expecting something in return.  The association’s ceo Stuart Wilson later issued a clarifying statement saying that it was not opposed to firms making donations to assist the victims but that companies should publicly disclose the amount and recipients so shareholders can be kept informed.

There is, of course, much more to corporate social responsibility than making a donation to help victims recover from a natural disaster.  It is an ongoing commitment to ensuring that the company’s activities are socially and environmentally sustainable.

While the opinions of business leaders cover a wide range, what about the opinions of consumers?  Ultimately, it is consumers who will determine the payoff from corporate social responsibility.  Their opinions and responses, as consumers, employees, and investors are critical.

In this Volume of Prophets Profit, we have in-depth coverage of the issues associated with CSR) which business leaders need to know about.  There is a survey of opinion leaders; a survey of consumer opinion, including ratings of some large companies, and an article by Gail Thomson describing how one company is making money while doing good.

Our track record

While still a new publication, Prophets Profit is developing a good track record for identifying future outcomes before any other publication.

The Australian Bureau of Statistics (ABS) in June released figures showing that there were more babies born in 2004 than in any year since 1995.  In the Australian Financial Review (AFR) this was described by Cherelle Murphy as bucking a very long-term trend towards declining fertility (page 3, June 4-5 2005).  Cherelle suggested that perhaps Australians had heeded the Treasurer’s call to have one child for each parent and one for the country.

The $3,000 baby bonus, which is not means tested, was announced in the May 2004 budget and was paid from 1 July 2004.  On 1 July 2005 it will be increased to $4,000.

Readers of Prophets Profit, the foreseechange magazine about forecasting and future trends (www.prophetsprofit.com.au), will be aware that we predicted this turnaround in the April 2004 Volume.  This forecast was based on age-specific fertility data for 2002, which was released by the ABS in November 2003.  This was before the baby bonus had been announced, although it had been mooted and we stated in the article that “it may not be necessary to embark on expensive fiscal encouragement of fertility”.

One of the major issues affecting business at present is the high price of petrol.  It is hurting on both the revenue and cost sides of the ledger.  In the September 2004 Volume of Prophets Profit, we explained why petrol prices would most likely continue to rise and concluded “the longer we delay investing in reducing our dependence on oil, the more financial pain we are likely to suffer in the future”. 

The vision of Peter Costello

I attended a business luncheon on 7 October at which the federal Treasurer Peter Costello spoke on the subject of sustaining economic growth.

He said that economic growth and security were intertwined.  Economic growth was necessary to ensure security and security was necessary to sustain economic growth.  He did not say that sustainable economic growth and the environment are intertwined.  But he did say that the biggest threat to our economy was the price of oil.  Perhaps he should connect a few dots!

He also reminded us about the falling ratio of workers to retirees.  Perhaps he did not intend to imply that retirees are economic parasites that pay no taxes and have no value to the economy.  We debunked that notion the first Volume of Prophets Profit – “the implications of the booming older population”.

Apart from linking security with sustainable economic growth, his only vision was industrial relations reform.

I don’t disagree about the need for security and for productivity improvements, although we will take issue with the government’s strategy on these issues in future editions of Prophets Profit.

But I am concerned about the narrow view on sustainable economic growth.  We will continue to explore a broader vision in Prophets Profit.