What is CSR?
Corporate Social Responsibility (CSR) is not a new business strategy. It has its roots in corporate philanthropy; a means for wealthy businessmen of the late nineteenth century to give something back to the community. The past few decades has seen a shift in corporate consciousness, becoming more of a ‘social contract’ between business and society before eventually becoming ingrained into the business model we see today. Stakeholders, from investor to consumer to employee, expect companies to be socially responsible, invested in improving society and the environment – even the smallest company can impact change.
A force for good
CSR uses the power of business to raise awareness of and encourage social change. Company initiatives can range from financial donations, community volunteering, marketing campaigns and ethically responsible business practices. Various guidelines have been developed to encourage CSR policies, but many are increasing their obligations to move away from voluntary to mandatory schemes, integrated into their overall strategies.
Of course, CSR is not always wholly altruistic, with some valid criticism being levelled at companies who use it merely as window dressing, obfuscating their less desirable business practices with a good CSR marketing campaign. But the efforts of companies nonetheless can have far-reaching results, and it is fast becoming a necessity for successful businesses to employ CSR practices.|
CSR has a wide range of positive benefits – and not only from an ethical stance. From a strategic perspective, research has found that companies benefit from better financial performance. It can also increase long-term shareholder trust through positive public relations, as well as new customer attainment. It also has an impact at a more organisational level, through higher employee morale, productivity and loyalty, and less employee turnover.
It makes sense, economically
Customers are becoming increasingly savvy to the ethics of businesses. Generation Z – the fastest growing consumer market – in particular believe that companies should be active and transparent in their efforts to be socially responsible. It stands to reason, then, that if you have customers that care about social causes, you will attract and retain them over a competitor without any social initiatives. Furthermore, smaller businesses that might find it hard to compete with larger businesses on price can level the playing field with their CSR policies. In a world where consumers increasingly seek out companies aligned with their own ethics, their loyalty goes a long way.
“92% of consumers have a more positive image of companies that support social issues and environmental efforts”
Don’t forget your employees
CSR has a significant impact on employees too. Companies with an ingrained CSR approach can help to instil pride, boosting morale and loyalty, which in turn leads to less employee turnover and more productivity. The ability to get involved in schemes such as volunteering or fundraising activities can likewise improve employee happiness in the workplace, not to mention the importance placed on the team building qualities these programmes can have. And, increasingly, the competitive graduate student market will be considering companies with impactful CSR programmes as part of their research.
CSR can be for everyone
Many of the large corporations have convincing CSR strategies. Johnson & Johnson has been working to reduce their environmental footprint for the past three decades, and of course companies such as Google, Walt Disney and Starbucks have similarly strong policies. Toms, the shoe brand, donates a pair of shoes for every pair sold, with over 60 million given to children in need thus far – this is also a good example of a brand using positive CSR initiatives to increase their market visibility. But of course, CSR is for everyone, no matter the size of company, and there are great examples of small and medium sized businesses that demonstrate the impact they can have. Elephant Pants make clothing and accessories in Thailand, and not only pay their production employees more than twice the minimum wage but also donate a dollar per product sold to organisations that rescue elephants. Another company, Sand Cloud, sells beach lifestyle products and donates 10 per cent of profits to marine life preservation organisations.
The impact is real
Today, CSR is essential to the bottom line, and is something that businesses of all sizes can have, across most industries. It should no longer be seen as a burden; indeed, rather than take away the focus of the business, it can enhance and grow it in the long term. The impacts are everywhere to be seen – from people, to planet, to profit – and it is important to remember that stakeholders go beyond the boardroom. When customers and communities are healthy and happy, your company will be as well.