Consumers Punishing ABUSIVE COMPANIES.

• Position: Brief Article

In the largest global survey on social responsibility ever produced--The Millennium Poll on Corporate Social Responsibility, conducted by Environics International Ltd.--more than half of the 22,000 consumers queried said that they responded negatively to actions by a company perceived as not socially responsible. The highest percentage of respondents cited social responsibility as the leading factor that influences their public impressions of companies. Furthermore, one in five of these respondents said that they had taken actions in the past year to "punish" such companies.

There are a number of potentially devastating consequences for firms that are not perceived to be conducting business responsibly. "No company wants to be known for sweatshops or child labor abuses, yet few have the capacity to monitor every one of their subcontractors worldwide," notes Heather White, executive director of Verite, an Amherst, Mass.-based nonprofit organization established to eliminate labor and human rights abuses from the supply chains of companies that rely on global outsourcing to produce their goods. "Businesses want to be made aware of abuses within their extensive supply chains. When you are outsourcing to as many as 600 factories, it's nearly impossible to keep track."

Global companies that do not ensure that their goods are produced under humane conditions run the risk of such financially damaging results as:

A drop in stock value. A growing number of socially aware investors conduct in-depth research before buying stock to ensure that they do not invest in companies that are perceived to be either directly or indirectly complicit in violations of international labor and human rights standards. Negative revelations about a firm's record or the factories that supply it can lead these investors to avoid--or sell--stock in the company and, in many cases, result in a deterioration in the value of the stock.

Consumer boycotts. In the Millennium Poll, 20% of the respondents said that they had taken actions in the past year to "punish" companies who were known to...