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"We call it the nonfinancial reporting," said Stangis, Intel's director of the annual and quarterly accounting of the company's efforts to minimize its environmental impact, improve the lives of people in the communities it affects and meet a variety of other benchmarks generally referred to as "corporate social responsibility."

Though it was conceived three decades ago, during the last five years, corporate social responsibility, or CSR, has played an increasing role in a company's reputation— and, by extension, its profit margins.

Linda Ferrell, an associate professor of marketing at the University of New Mexico's Anderson Schools of Management, defines CSR as paying attention to the interest of every affected stakeholder in every aspect of a company's operation. To be considered socially responsible, a company is expected to go far beyond laws limiting emissions or setting minimums for employee benefits. Similarly, CSR is also seen as going beyond making donations or encouraging employees to volunteer locally.

"It's saying we do care about the environment, we do care about communities, we do care about our employees, and we do care about more than just our customers and investors," she said.

Consumer controls
Enlightened consumers, more than anyone else, have the power to keep companies in line, says Rob Rikoon, whose Santa Fe investment firm, Rikoon Wealth Management Group, invests a $400 million fund in company stocks and venture capital rounds with a focus on alternative energy and green businesses.

"If they object to a product or the behavior of a company, organizing a boycott is 100 times more effective than anything else," he said, citing recent successful efforts by environmentalists to discourage Home Depot's sales of endangered wood products.
"The threat to sales or reputation can mean much more to a company than investor action," Rikoon said.

Which isn't to say being an investor doesn't help.

During the Vietnam War, a group of Methodist ministers set up the Pax World Fund, which invested in companies that were not in the military, alcohol or gambling industries. Over the years, the concept of socially responsible investing has shifted toward encouraging companies that seek sustainability.

Stock benchmarks, such as the Dow Jones Sustainability Index, link a company's financial performance to social and environmental criteria, and there are a wide range of mutual funds targeted at customers who would like to make investments in green businesses.
Christine McDermott, chief investment officer of Santa Fe-based Avalon Trust and a member of the Certified Financial Analyst Institute, says it's not hard to find a mutual fund or other investment vehicle suited to a particular cause, whether it be religion, environmental protection or human rights.

Her firm manages money for wealthy individuals, endowments and families and seeks companies for which commitment to stakeholders besides investors is paramount.
"I think companies that are thinking about these sorts of things are also innovative and growth-oriented by nature," she says. "These people are just forward thinking. In the future, this might be the only way to do business."

Economic sense
It's certainly a departure from the 1970s, when CSR was just beginning to come into vogue. Back then, the free-market economist Milton Friedman wrote in the New York Times Magazine that a business' only responsibility was to "increase its profits."

That thinking tanked. Today, the nonprofit trade organization Business for Social Responsibility, based in San Francisco, has a membership of 250 Fortune 1,000 companies, most of which report compliance with CSR standards to entities like the International Standards Office. Consumers and investors alike have bolstered CSR by choosing companies for their environmental and humanitarian work— making such efforts part of many companies' overall financial picture, says Diane Osgood, vice president of CSR Strategy for Business for Social Responsibility.

"The legal mandate of a public company is to make a return for the shareholders," she acknowledges. "But the reason a corporation would choose to be involved in CSR is that it makes sense economically, and it's the right thing to do."

Though it is most popular in Europe, and less popular in the U.S., global companies here and abroad have helped spread the concept to their suppliers and partner companies in Asia and elsewhere around the world.

"The trend has been exponential growth over the last five to seven years," she said.
Because there are no national CSR standards, interpretation is largely in the eye of the beholder. For instance, says Anderson Schools marketing professor O.C. Ferrell, the McDonald's restaurant chain is highly regarded for its efforts to switch from ozone-depleting styrofoam packaging to paper, but it, and many restaurants, have done little to combat what some believe is a growing childhood obesity crisis. Efforts to diversify menus with healthy snacks, such as fruit, can be seen as little more than window dressing when a company's flagship products are still laden with fat, he said.

And oil companies, he says, are also frequently accused of disingenuously "greenwashing" business as usual.

"I think there are a lot of companies out there that actually have to prove they are socially responsible," says O.C. Ferrell, who is Linda Ferrell's husband.

For Intel, the world's largest computer chip maker, social responsibility means efforts to reduce manufacturing emissions and water use, encourage recycling, improve building and process efficiencies and engage in social projects ranging from helping local schools to using technology to reduce illegal tree poaching in South American forests. The Santa Clara, Calif.-based company has had a CSR office in Chandler, Ariz., since 2000.

Ultimately, Stangis says, companies are striving for sustainability. "We want to be able to operate forever with no impacts, or positive impacts, on everything we touch, while still making a profit," he said.

Feedback Welcomed
Diane Osgood, vice president of CSR Strategy for Business for Social Responsibility, says that, despite popular belief to the contrary, companies that strive for social responsibility really do want feedback or even questions about suppliers or raw material sources.

"One of the frustrations we hear from our members is the companies that actually do social responsibility reporting, they always have a 'let us know what you think' option, and it doesn't get used," she said. "If we don't (make it) our responsibility to ask questions, they can't read our minds."