High performing businesses show a strong correlation between Corporate Social Responsibility (CSR) activities and stronger performance in terms of productivity and profitability than other businesses, according to new research.

The report, Achieving High Performance: CSR at the Heart of Business, published today, argues that there is now strong evidence to indicate that building CSR activities into the heart of business strategy leads to higher productivity and profitability.

Analysis conducted by The Work Foundation and The Virtuous Circle found that across all business areas, from creating shareholder value to engaging customers and employees, CSR activities have added value – from 19% increase in profitability in one study to outperforming other organisations by more than 40% in another.

Employees made a greater contribution towards their organisation if they saw it as being a more responsible employer and this in turn influenced their decision to remain with that employer. Conversely, a strong correlation existed between increased sales volume and the perceived quality of line management, corporate culture, employee commitment and customer retention.

Similarly, the studies that concentrate on CSR and customer preferences show that the highest levels of employee satisfaction relate to the highest levels of customer loyalty and earnings. The message to businesses is clear – ethical practice, CSR performance and 'the bottom line' are more closely linked than ever.

However, few business leaders have been sufficiently convinced about the business benefits of CSR that they have embedded those activities throughout their organisations, the majority still pay lip service to CSR.

"CSR activities aren't optional any more. We know that unless we place such activities at the heart of our business strategies we won't deliver the performance benefits that this report shows are clearly available. CSR is no longer about buffing up one's corporate reputation. It's about doing good business," warned Paul Bateman, Boots Group plc HR and operations director.

Adrian Hosford, director BT Group Social Policy, said:
"Creating a quantified, realistic business case is the critical issue for most companies on CSR."