Corporate social responsibility disclosures are a double-edged sword, new research suggests [Video]

Hoping to win over customers, businesses from Amazon to Zoom have taken to touting their good deeds in corporate social responsibility reports.

CSR reports let companies spotlight what they’ve done for workers, consumers, communities and the environment – essentially all their goals beyond simply making a profit. Research shows that CSR statements are linked to rising sales.

As a marketing professor, I thought that raised an interesting question: When companies find success with CSR disclosures, are they bringing in new customers – or are their extra sales coming from their existing base alone?

In a recent study of several hundred Chinese companies, a colleague and I put the question to the test. We found that a CSR disclosure lowers a business’s dependence on current customers by 2.1%.

That’s welcome news for businesses. It means those additional sales are coming from new customers, who are indeed impressed by the company’s CSR efforts.

But the findings weren’t all positive.

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