How Virtue Creat ...
2010
Boston College Center for Corporate Citizenship

How Virtue Creates Value for Business and Society

This report shows that there are clear financial reasons for companies to invest in corporate social responsibility or sustainability initiatives - these programs can generate direct financial returns of as much as 3 to 1, and quantifiable shareholder value. Overall, companies that excel in their social, environmental, or governance programs see improved performance in each of the standard dimensions that investors use to assess value: growth, return on capital, risk management, and management quality.

However, companies will only reap their program’s full financial rewards if they can understand the value they are creating and communicate that value to the markets. Therefore, it is critical for companies to establish metrics and track the impact of such programs on value - which few are able to do today.
This report illustrates some of the ways that the most advanced companies have created value from their environmental, social, and governance programs. It also explains why such programs are so hard to assess quantitatively, and lays out a framework for how companies can develop programs strategically, meaningfully assess the value they create, and communicate that value internally and externally.
 

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