Corporate Social Responsibility and Ethics in the Age of the CustomerRenee Murphy, Principal AnalystSecurity and Risk Management

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Agenda

› Ethical Failure Hall of Fame› Ethical Failure Impacts Reputation› The Advantage of Ethics

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Ethics MatterEthics Failure Hall of Fame

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Unethical Sales Practices

Questionable Ethics

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Unethical. Period.

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Safety Failure

Cheated Emissions Testing

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Industry Wide Damage

“Daimler Chairman Manfred Bischoff consented, releasing compliance chief Christine Hohmann-Dennhardt from her contract so that she can take over a new VW management-board position focused on integrity and legal affairs.” – Bloomberg.com

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CSR Risk Is Growing!

Base: Global security decision-makers who are “concerned” or “very concerned” about CSR and environmental sustainability riskSource: Forrester Data Global Business Technographics Security Survey, 2014; 2015; 2016; 2017

35%40% 41%

46%

2014 (N=1,142) 2015 (N=3,543) 2016 (N=3,588) 2017 (N=3,752)

Please rate your concern for each of the following types of risk and the potential impact they could have on your organization.

Corporate social responsibility and environmental sustainability risk

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CSR Risk Is Higher For Enterprises… and Growing Faster!

45%46%

48%

51%

2014 (N=432) 2015 (N=1,713) 2016 (N=1,632) 2017 (N=1,700)

Please rate your concern for each of the following types of risk and the potential impact they could have on your organization.

Corporate social responsibility and environmental sustainability risk

Base: Global security decision-makers at firms with 1,000 employees+ who are “concerned” or “very concerned” about CSR and environmental sustainability riskSource: Forrester Data Global Business Technographics Security Survey, 2014; 2015; 2016; 2017

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CSR Risk Is Growing Everywhere!

Base: 78-1,387 Global security decision-makers who are “concerned” or “very concerned” about CSR and environmental sustainability riskSource: Forrester Data Global Business Technographics Security Survey, 2014; 2015; 2016; 2017

29%34%

39% 38%

29% 29% 32%38%

50% 51% 53% 54%47%

59% 57%

70%

2014 2015 2016 2017

Please rate your concern for each of the following types of risk and the potential impact they could have on your organization.

[CSR and environmental sustainability risk]

North America Europe Latin America Asia-Pacific

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Base: North American online adults (18+) Source: Forrester Data Consumer Technographics® North American Online Benchmark Survey (Part 1), 2015 & 2016

69%

46%

29%

75%

52%

32%

My health and wellness are priorities for me I consider myself to be environmentally conscious

I regularly purchase organic or natural products

Rise of the informed consumer

2015 (61,222) 2016 (60,049)

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Base: 33,471 US Online adultsSource: Forrester Data North American Consumer Technographics Online Benchmark Survey (Part-2), 2017

33%

19%

65%

39%

29%

22%

28%

51%

13%

When I find out media content (i.e., online or print articles, videos) is sponsored by a brand, I trust it less

I think it's unethical for brands to disguise their advertisements as media content (i.e., online or print articles, videos)

It's ok for companies to track my activities across multiple devices to send me more relevant ads (e.g., use my mobile browsing history to

show related ads on my laptop or desktop)

How strongly do you agree, if at all, with each of the following statements?

Do not agree Neutral Agree

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Agenda

› Ethical Failure Hall of Fame› Ethical Failure Impacts Reputation› The Advantage of Ethics

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Brand promise

Brand experience

Brand resilience

Resilient brand Vulnerable brand

Risk pros’ role: Ensure the brand experience aligns with the brand promise

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All Incidents Have Impacts

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Agenda

› Ethical Failure Hall of Fame› Ethical Failure Impacts Reputation› The Advantage of Ethics

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Ethics as a Competitive Advantage

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Reputation is an even greater concern in the age of the customer

Source: “Dissecting Global Risk Perceptions And The Effects Of Customer Obsession” Forrester report

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…One More Thing

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What if…?

If… had the reputation of…

their stock would rise…

• 3.3% ($4 billion in market share.)

• 6.2% ($2 billion in market share)

• 6.9% ($3.9 billion in market share. Source: Mission: Intangible: Managing Risk and Reputation to Create Enterprise Value, Dr. Nir Kossovsky

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Does it really matter?

Best

Wor

st

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Security Breach

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Quality Breach

Thank you

forrester.com

Renee Murphyrmurphy@forrester.comBlogs.forrester.comr/renee_murphy