Ascending Profits: The Corporate Climb

When Mountain Equipment Co-op (MEC) dropped more than a quarter-million dollars to help turn a popular rock-climbing site into a provincial park, the obvious question was: why?

The iconic retailer will surely score some goodwill through the donation, but there are also some less karmic business reasons for this kind of generosity. This may well be a stellar example of just the kind of corporate community involvement more and more companies are struggling to do right.

Climbers have been enjoying the diverse cliff faces of the Skaha Bluffs near Penticton for years. But when the sale of private land adjacent to the bluffs threatened to cut off public access, nature-conservation groups moved in, buying a $5.25-million tract of land in January with hopes to make the area a provincial park. MEC donated more than $350,000 to the project, and its members donated another $140,000.

While managers at MEC describe the deal in rosy non-profit language, SFU business professor John Peloza calls it a brilliant tactical business move.

Peloza, whose work focuses on corporate social responsibility, says there’s a growing awareness in business circles that a little social kindness can pay for itself in a big way. For one thing, researchers have found that customers are willing to spend more at companies with a good ethical vibe, he says. It also makes a huge difference with employees; a giving spirit often leads to strong retention rates.

It’s also a way for companies to stock up on valuable PR insurance for potential future gaffs, Peloza says. “So when someone sees a product scandal at Mountain Equipment Co-op, they say, ‘Well, it’s probably not their fault, because they’re a good company,’” Peloza says. “You rationalize these things based on your emotions.”