This analysis [by Laffer associates] does not support the claim that CSR is positively correlated with business profitability. Future efforts to evaluate the effect of CSR initiatives on profitability should be careful to tease out the specific financial impact of CSR initiatives, rather than relying on crude analyses that, at best, may only really show that profitability leads to CSR.

We found few players (out of the nine groups surveyed) that exert meaningful pressure on companies, apart from NGOs, which are increasingly frustrated about (1) companies’ newly learned abilities for handling – not resolving – their stakeholders and issues more systematically, and (2) other stakeholders’ widespread ignorance about corporate sustainability. This is precisely why the current largely incremental approach to corporate sustainability – characterized by stakeholder dialogues, minor modifications of processes and products, lots of window-dressing and few changes in strategies and culture – is, from a stakeholder management and profit maximizing point of view, absolutely rational.

Currently companies do not need to worry. However, will this comfortable position eventually lead to complacency and to the downfall of corporate dominance? After all, one of the few “iron laws” appears to be that one can only maintain power, if one uses it responsibly.

Let us move to the less good news (that leave however room for improvement in many ways). The first is that most of the CSR scores considered in the analysis do not seem to contribute to explaining profitability. The ’big absent’ is the environment dimension.