The halo effect

摘要

"There is one and only one social responsibility of business," wrote Milton Friedman, a Nobel prize-winning economist. "To use its resources and engage in activities designed to increase its profits." Plenty of climate-change campaigners would argue with that (see page 59). But even if you accept Friedman's premise and regard corporate social responsibility (CSR) policies as a waste of shareholders' money, things may not be absolutely clear-cut. New research suggests that CSR may create monetary value for companies-at least when they are prosecuted for corruption. The largest firms in America and Britain together spend more than $15 billion a year on CSR, according to an estimate last year by EPG, a consulting firm. This could add value to their businesses in three ways. First, consumers may take CSR spending as a "signal" that a company's products are of high quality. Second, customers may be willing to buy a company's products as an indirect way to donate to the good causes it helps. And third, through a more diffuse "halo effect", whereby its good deeds earn it greater consideration from consumers and others.