How Does Corporate Social Responsibility Affect Revenue and Consumer Opinion

Student: Gabriella Biagini* and Geena Maniaci*
Mentor: Karen Cascini
Major: Accounting

Corporate Social Responsibility (CSR) can be defined as a company’s initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare.  The term generally applies to company efforts that go beyond what may be required by regulators or environmental protection groups.  After analyzing the CSR of four different companies in two different industries, the conclusion can be made that CSR affects revenue and consumer opinion.  BMW, a company with favorable CSR , has had no significant dips in sales, which has led to very consistent financial statements.   Toyota, a company who has had negative public perception recently due to recalls, has seen a decrease in sales of almost nine percent as a result.  Negative media coverage spreading Toyota’s negligence has led consumer perception of the Toyota brand to change for the worse.  This means consumers are less likely to buy their vehicles.  NBTY, a nutritional supplement distributor, has made positive corporate social responsibility their mission.  They have won several awards as a result.  This is positively reflected in their financial statements as NBTY revenue has increased each of the past three years.  GNC, another nutritional supplement company, has had major issues with CSR over the past few years.  They have been accused of selling products that have caused death and selling products with labels listing false ingredients.  Due to this issues GNC has seen a decrease in revenue.  The negative attention led to costly lawsuits and to consumers feeling as if they could not trust GNC products.  After comparing BMW and Toyota as well as NBTY and GNC, one can concluded that CSR does have an effect on consumer opinion and the financial statements.

*Honors Senior