Can a company become more profitable by investing in corporate social responsibility (CSR) programs? This is the question asked by Margolis and Elfenbein in a study that is reported in the January issue of Harvard Business Review under the headline: “Do Well by Doing Good? Don’t Count on It.” In their meta-analysis of 167 studies that were conducted over 35 years, they found a weak correlation between social performance and profitability, but they also found very few companies in which being socially responsible increased the cost to shareholders. They conclude the article by saying that managers shouldn’t assume that CSR will result in greater profitability.

Karl Weber in The Triple Bottom Line Blog, has a different take on the findings. He argues that because CSR does not threaten profitability, companies should support it. He writes:

If Margolis and Elfenbein are right, the fact that no such conflict exists immediately eliminates most or all of the cited rationale behind resisting calls for social responsibility. It shifts the burden of proof from CSR advocates to their opponents: After all, if CSR is (in effect) cost-free, why not make an effort to do the right thing? What is the upside to behaving ruthlessly if it is not even rewarded in the marketplace?

Of course, correlation does not prove causality. The fact that a company acts socially responsible and, at the same time, is profitable does not mean that CSR caused its financial performance. It only means that companies can be both socially responsible and profitable. One does not preclude the other. Left out of this discussion of CSR is the effect on employees. There is much talk these days about the importance of employee engagement. Many people argue that employee engagement has a positive effect on employee performance. CSR is a way to increase employee engagement because many (not all) employees are motivated by knowing that they work for a company that is socially responsible. Therefore, one could argue that CSR, employee engagement, and profitability are the triple threat of a responsible company.