New National Cone Survey Finds Americans Intend to Punish and Reward Companies Based On Their Corporate Citizenship Practices

Business Wire, Oct 2, 2002

Business Editors

BOSTON--(BUSINESS WIRE)--Oct. 2, 2002

Recent Financial Scandals and Post-September 11th Climate

Heighten Americans' Sense of Activism

As corporate scandals continue to plague many prominent companies, Americans as consumers, employees and investors say they are willing to act against socially irresponsible companies, including boycotting their products. On the other hand, Americans are just as eager today as they were in the months following the September 11th tragedy to reward good corporate citizens, maintaining nine-year record highs of public support for companies that address social needs.

According to the 2002 Cone Corporate Citizenship Study, Americans say they would be likely to react in the following ways if they were to find out about a company's negative corporate citizenship practices:

-- Consider switching to another company's products or services (91%)

-- Speak out against that company among my family and friends (85%)

-- Refuse to invest in that company's stock (83%)

-- Refuse to work at that company (80%)

-- Boycott that company's products or services (76%)

Propelled by the ongoing financial abuses afflicting the business community, Americans' emphasis on corporate values has not faltered since the September 11th tragedy, when many reevaluated their priorities in life and promised increased support for companies that shared their values. Seventy-eight percent of Americans today say that companies have a responsibility to support social issues, a figure nearly identical to the finding from Cone's October 2001 survey (79%) and 20 percent higher than the pre-tragedy result from Cone's March 2001 poll (65%). The recent corporate scandals have only reinforced Americans' expectations of corporate citizenship. Eighty-nine percent say that in light of the Enron collapse and WorldCom financial situation, it is more important than ever for companies to be socially responsible.

"With corporate citizenship a high American priority, and with a majority of citizens willing to exercise their individual power, the consequences of corporate social irresponsibility have never been more severe," says Carol Cone, CEO of Cone, a Boston-based strategy firm that links companies and social issues. "On the other hand, our research demonstrates that Americans are willing to reward good corporate citizens, so companies that integrate their social commitments into business strategy can reap the benefits of `positive' activism."

Corporate Social Commitments Influence Many Key American Decisions

Companies' social commitments remain just as important to many of Americans' key community, employment and investment decisions as they did one year ago - and 40-60 percent higher than pre-tragedy figures:

"A company's commitment
to social issues is
important when I decide..." Post-September 11th   Pre-September 11th
                               July 2002         Oct 2001   March 2001
Which companies I want
 to see doing business            84%               80%        58%
 in my community

Where to work                     77%               76%        48%

Which stocks/mutual
 funds to invest in               66%               63%        40%

Rewards for Good Corporate Citizens Remain at Nine-Year Record Highs

Americans today are just as eager to reward companies that address social needs as they were immediately following the September 11th tragedy. This consistent level of "positive" activism is the highest since Cone began conducting research on companies and social issues in 1993:

                             Post-September 11th  Pre-September 11th

                           July 2002 Oct 2001 Mar 2001  1999   1993
When a product or company
 supports a cause I
 care about, I have a
 more positive image of
 that product or company       92%       92%    81%      83%    85%

I would be likely to
 switch from one brand
 to another that is about
 the same in price
 and quality, if the
 other brand were
 associated with a good cause  84%       81%    54%      65%    66%

Americans Want to Know About Corporate Citizenship Efforts

As the drama surrounding the current financial scandals continues to unfold, nearly nine in ten Americans (86%) agree that companies should communicate their support of social issues. Highlighting Americans' deep mistrust of companies today, however, an overwhelming majority say they prefer to find out about corporate citizenship activities from a third-party source, particularly the media:

-- News article or editorial (51%)

-- Corporate Web site (36%)

-- Direct mail (30%)

-- Corporate annual report (30%)

"More than ever, Americans want to know about companies' corporate citizenship activities, and they will form opinions of a company's brand based on those efforts," says Cone. "Companies must respond to this heightened sense of activism by behaving ethically in all of their business practices, which certainly include their social commitments. The rewards for good corporate citizens are enhanced reputation and stakeholder loyalty; on the other hand, corporate `bad guys' face an empowered citizenry that is ready and willing to use its resources to punish companies that do not share their values."