Business & Economy

The Halo Effect

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In case companies are still undecided on the value of taking on greater social responsibility as part of their business, here is another example that doing the right thing can have benefits besides the good it brings in and of itself. A recent study at Princeton University and the University of Texas shows that companies who engage in CSR receive less severe penalties than those who are less focused on these efforts. In fact, those companies can have fines that are 40% lower than companies who do not engage in such activities.

The report also found that certain types of behaviour are more rewarding than others, with employee and community relations being the most profitable. While it is hoped that people are willing to do the right thing regardless of the consequences, it should come as no surprise that doing good business might yield unintended benefits. What is perhaps more questionable is whether law enforcement should factor in a company's broader social engagement when determining fines.

Do you think it’s appropriate for companies who engage in CSR to receive less severe fines?

What areas of CSR do you think companies are doing well at? What are areas where additional focus in needed?

Source: The Economist

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