The ROI of Corporate Social Responsibility: Lessons from Old National Bank's Volunteer Impact

In an era where investors increasingly demand proof that corporate social responsibility (CSR) and environmental, social, and governance (ESG) initiatives deliver tangible value, Old National Bank offers a compelling case study. The bank's volunteer programs, which generated over 67,000 hours of community service in 2024 alone, exemplify how strategic CSR can align with long-term profitability. By examining Old National's approach, we uncover how community engagement not only strengthens societal bonds but also drives financial resilience through employee retention, brand equity, and operational efficiency.

The Volunteer Imperative: Skills-Based Volunteering and Human Capital

Old National's Better Together Days initiative, where 2,433 employees volunteered 7,600 hours across 196 organizations in 2024, underscores the power of skills-based volunteering (SBV). According to a report by MovingWorlds, SBV programs can reduce employee turnover by up to 50% and enhance leadership skills, directly contributing to productivity gainsThe ROI of Corporate Skills-Based Volunteering (With …^[4]. For Old National, this aligns with observed outcomes: higher retention rates and a culture emphasizing purpose-driven workOld National, NCRC Announce Addendum to Increase Community^[2].

The financial implications are significant. Employee turnover is costly, with estimates suggesting replacement costs range from 50% to 200% of an employee's salary. By fostering loyalty through volunteerism, Old National likely mitigates these expenses while cultivating a workforce more attuned to its community-centric mission. This synergy between social impact and human capital management is a key driver of its ESG alignment.

Community Investment as a Strategic Lever

Beyond volunteer hours, Old National's Community Growth Plan—a $8.3 billion commitment to underserved communities—demonstrates how CSR can be scaled into a strategic asset. In 2024, the bank expanded this plan by $1.2 billion, targeting affordable housing, small business lending, and racial equity initiativesOld National, NCRC Announce Addendum to Increase Community^[2]. For instance, its $8.6 million investment in Low-Income Tax Credit Equity and a $3.5 million bridge loan for the Beechwood Court Apartments project transformed aging properties into affordable housingThe ROI of Corporate Skills-Based Volunteering (With …^[4].

These investments are not merely altruistic. By addressing systemic inequities, Old National taps into markets that traditional lenders often overlook. The bank's 2024 financial results—net income of $149.8 million and an adjusted efficiency ratio of 51.8%—suggest that such initiatives coexist with disciplined cost managementOld National Bancorp Reports Fourth Quarter and Full-Year 2024 Results^[3]. Moreover, supporting economically disadvantaged communities aligns with regulatory trends favoring inclusive growth, reducing reputational and compliance risks.

ESG and Financial Performance: Indirect Metrics Matter

While Old National's ESG reports do not explicitly quantify ROI, indirect metrics reveal a strong correlation between its CSR efforts and profitability. For example, its recognition as one of “The Civic 50” for two consecutive yearsOld National, NCRC Announce Addendum to Increase Community^[2] enhances brand reputation, a critical intangible asset in banking. A 2024 study in Sustainability Accounting Standards Board (SASB) frameworks notes that firms with robust ESG profiles often see lower capital costs and higher customer retentionOld National Releases 2023 ESG Report^[1].

Additionally, Old National's 2024 ESG Report highlights $11.8 million in corporate giving and over 57,000 volunteer hours in 2023Old National Releases 2023 ESG Report^[1]. Though direct financial returns are not stated, the bank's focus on community trust likely strengthens customer relationships. In banking, where trust is paramount, this can translate to higher deposit growth and loan origination rates.

The Bigger Picture: ESG as a Long-Term Hedge

Old National's approach reflects a broader shift in corporate strategy: ESG is no longer a peripheral activity but a core component of risk management. Its emphasis on affordable housing and small business lending, for instance, diversifies revenue streams while aligning with macroeconomic trends such as urban revitalization and entrepreneurship.

Financially, the bank's 2024 results—resilient credit quality (net charge-offs of 21 bps) and a conservative allowance for credit losses—indicate that its ESG-driven risk mitigation strategies are paying offOld National Bancorp Reports Fourth Quarter and Full-Year 2024 Results^[3]. By prioritizing communities with long-term growth potential, Old National reduces exposure to volatile markets and regulatory penalties.

Conclusion: A Model for ESG-Driven Growth

Old National Bank's experience illustrates that the ROI of CSR is not always captured in quarterly earnings but is embedded in long-term value creation. By treating volunteerism and community investment as strategic imperatives, the bank strengthens employee engagement, customer loyalty, and regulatory resilience. For investors, this underscores a critical insight: ESG alignment is not a cost center but a catalyst for sustainable growth.

As the financial sector grapples with balancing profit and purpose, Old National's model offers a roadmap. Its success lies in the seamless integration of CSR into its operational DNA—a strategy that rewards both communities and shareholders.