Green Mountain has built much of its brand image around its social-responsibility efforts, stating that it is "a values-driven company that views profit as a means to achieve a higher purpose.... We are motivated to achieve success because the more profitable we are, the more good we can do in the world." The coffee roaster has actively marketed its Fair Trade coffee and promoted the fair-trade concept, in which farmers are guaranteed a minimum price for their beans rather than being subjected to the vagaries of spot pricing or gouging by middlemen.

Like Lawrence, Rathke links the "feel-good" aspect of the brand to good sales. "More and more people are using their purchasing dollars where they trust the brand or the product or the company, and a reputation for being socially responsible helps increase your brand awareness and brand loyalty," she says.

Other companies are seeking to share some of the goodwill generated by such a reputation: McDonald's, for example, striving to improve its own image following reams of bad press about the health effects of its products, recently signed on to carry a co-branded Green Mountain and Newman's Own Organic line of coffees at 650 of its franchises in New England and Albany, New York. The deal helped drive a 60 percent gain in Green Mountain's shipments of certified Fair Trade and organic coffees in the third-quarter ended in August.

Energizing the Bottom Line
If the impact of reduced supply-chain risk or increased brand loyalty can still be hard to quantify, at least one element of the CSR movement presents a solid case to the CFO's office. With rising energy prices, many companies are realizing prompt returns on environmental programs. Beth Nickels, finance chief at furniture manufacturer Herman Miller, says the company sees $4.5 million in annual savings from $2 million in annual spending on environmental initiatives.

Modine Manufacturing, an NYSE-listed maker of heating and cooling components for automotive companies and other equipment manufacturers, is capitalizing on growing energy concerns. "We find ourselves in a great position in that the world's objectives around emissions reduction are very much aligned with the products we're developing," says CFO Bradley Richardson. Products include an exhaust gas-recirculation cooler that helps diesel-engine manufacturers meet federal emissions standards.

The company also practices rigorous energy and emissions control in its own facilities. In 2005, Modine announced that it aimed to reduce energy use at its 35 plants worldwide by 12 percent. Plants that met the goal were then asked to cut energy use by another 12 percent this year. Modine has also devoted a portion of its capital-expenditure budget to pay for future energy-reduction efforts. "Ideas are submitted to me and to our head of environmental affairs," explains Richardson. "We rank projects on overall attractiveness in terms of net present value and payback period, using the same process we use for any capital expenditure." Some projects have payback periods as brief as 60 days.

Measuring Intangibles
CFOs insist that intangible effects boost the bottom line, too. Like Grant Thornton's Nusbaum, they repeatedly cite recruiting and retention benefits from CSR programs. "We're a relatively small company based in New Hampshire, and it's amazing to me the extremely talented people who have a passion to come and work here," says Brian McKeon, finance chief at The Timberland Co., another company that has closely linked its brand to social responsibility. The shoe maker conducts an employee-satisfaction survey each year and has consistently found that workers cite the company's volunteer program, in which employees receive 40 hours a year to volunteer during work hours, as a draw. "People relate to the values of the company," says McKeon.

A 2003 academic study supports this theory: Stanford University Graduate School of Business research on MBAs from European and North American business schools found that respondents would forgo an average of $13,700 in compensation to work at a company that had a stronger reputation than its competitors for environmental sustainability and caring about employees and stakeholders.

Of course, social-responsibility programs are not without pitfalls. BP has been criticized for its "Beyond Petroleum" ad campaign, which has struck some observers as so much "greenwashing," coming from a company that derives more than 90 percent of its revenue from oil and gas. Its reputation was not improved when a corroded Alaskan pipeline it operated spilled at least 200,000 gallons of crude oil in March. Federal investigators are examining whether the company manipulated the market for crude oil and unleaded gasoline.

Wal-Mart has generated tentative enthusiasm for its environmental initiatives, but the company has a long way to go in its labor relations before it can truly be considered socially responsible. Even companies known for social responsibility can run into trouble, as Timberland did when one of its contractors in China was accused of overworking employees and relying on child labor, among other violations. The company still calls 54 percent of its overseas factories "high priority" locations, citing issues such as employees working more than 60 hours per week, falsification of documents, and contractors' failure to pay the legal minimum wage.

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