“It’s alluring and very much in vogue to connect social responsibility with profitability,” an article in The Harvard Business Review begins. “If you can make a business case for positive social action, everybody wins — employees, shareholders and society at large.”
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That, of course, leads to the question: Is there such a link?
The issue has been studied to death. And after reviewing a huge number of the studies, the writers say, the answer is that if there is a link, it is “not a strong one.”
Joshua D. Margolis of Harvard Business School and Hillary Anger Elfenbein of the University of California, Berkeley, say they analyzed 167 studies conducted in the last 35 years that examined the issue of whether social responsibility leads to increased profitability and found that while it certainly did not hurt — that is it did not diminish shareholder value — there was only “a very small correlation between corporate behavior and good financial results.”
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