Who's Responsible?

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Open up The New York Times and the full-page ad smacks you in the face: The Rainforest Action Network is thanking home-and-garden-center chain Home Depot for pledging to discontinue the sale of wood products from endangered forests by the year 2002. The ad copy reads in part: "The Home Depot also recognizes that it's good business to be environmentally responsible, knowing customers want to spend their money with companies who do the right thing."

You bet they do. In a new survey by The Conference Board, roughly 46 percent of Americans say they have either purchased from or spoken out in favor of a company that they considered socially responsible in the past year. Consumers are slightly more likely to dis a business if it scores low on social causes: 49 percent say they've avoided buying a firm's products or spoken critically of a company in the past year because of negative perceptions. The U.S. survey is part of a larger worldwide poll of public opinion on the changing role of companies. More than 20,000 interviews were conducted in 20 countries, including China, Russia, and South Africa. Globally, more than one in five respondents say they've taken some action because of a corporation's dismal social performance.

What matters most to U.S. consumers when they're judging companies? Collectively, roughly 56 percent cite a corporation's social responsibilities, such as labor practices, business ethics, and environmental issues. Coming in a close second was brand quality, image, and reputation, mentioned by 55 percent of respondents (multiple answers were allowed). In the global study, consumers ranked these factors in a similar way. Nearly six out ten respondents worldwide say they form impressions of a company based on its social responsibilities, and 40 percent say they're influenced by brand quality.

Apparel giant Nike learned the hard way about consumer activism. For years, its image has been tarnished by charges that its overseas facilities have unsatisfactory working conditions. Last month, in a significant concession to labor rights groups, the company disclosed the sites of dozens of its overseas factories that make athletic gear for colleges and universities. "Here's your chance to criticize us more accurately" read an ad Nike placed in several college newspapers to make its announcement. Perhaps other companies will follow Nike and take a chance as well.

For more information about "Consumer Expectations on the Social Accountability of Business," contact The Conference Board at (212) 759-0900.

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