We live in one of, if not the most socially and environmentally conscious periods in human history. Consumers, employees, and more recently, investors are keeping a watchful eye on how organizations of all sizes conduct business. The impact generation is ready and waiting to hold organizations to account by shining a light on shady business practices that harm society and the planet. With an age of savvy internet and social media users on their tails, large corporations and small to medium businesses can no longer hide social negligence behind closed doors.
In 2019 and beyond, one of the primary focuses of any business strategy should be good corporate citizenship. Is your business doing harm or good on a local, national, and global front? Corporate citizenship is not just about pleasing the immediate community. All levels of social impact should be considered — for example, issues with supply chains that negatively affect international communities matter.
The impact generation might sound nerve-wracking to many business owners on the surface. Rest assured, when organizations show a substantial commitment to being socially responsible corporate citizens of the world, a galvanized group of consumers, employees, and stakeholders will root for their success. The journey to being an excellent corporate citizen starts by considering corporate social responsibility. But what does corporate social responsibility mean, and can it genuinely benefit your business?
Let’s take a closer look.
What Is CSR?
As a business owner, you might have heard the term corporate social responsibility or CSR for short. A business strategy inclusive of CSR embeds socially conscious practices into all aspects of the day to day running of an organization. Business growth should be conducted in a socially responsible and sustainable manner, taking into account people, planet, and profit. Business practices should include ethical labor practices, environmental efforts, philanthropy, and volunteering.
CSR is crucial to business survival, as it reflects the evolving requirements of informed consumers, employees, and investors. Your corporate social responsibility efforts should make a clear statement about the causes that your organization believes are integral to create a better future for everyone. Key findings from Cone Communications highlight the importance of this endeavor. Finding:
- 63% of Americans are hopeful businesses will take the lead to drive social and environmental change moving forward, in the absence of government regulation
- 87% will purchase a product because a company advocated for an issue they cared about
- 76% will refuse to purchase a company’s products or services upon learning it supported an issue contrary to their beliefs
Being a good corporate citizen is not just about including socially conscious practices into your business model. The general public also requires you to take a stance on important social issues. For example, when it comes to climate change, research commissioned by The Climate Group shows nearly 64% percent of young Americans (aged 18-24) believed American companies should be doing more. How is your business set on this issue?
Incorporating CSR Within Business Strategies
Half the battle is knowing where and how to start. It is advisable your organization advocates for social issues that also make business sense. Consider an issue your company has a comprehensive understanding of, and see how it aligns with your core business values, mission, product or service. At Useful Views, CSR is our wheelhouse, and we would be happy to discuss creating a robust and effective strategy to help your business in this area.
Let’s stick with climate change as an example. During Climate Week NYC 2019, over 150 companies closed for business. Organizations included smaller local business alongside powerhouses like The North Face and Ben & Jerry’s. With this act, they signaled their support for climate action to consumers, and investors loud and clear. Whilst also ensuring employees had time off in order to join the climate strike. Furthermore, companies across the world, like UK Pukka Herbs and German Bosch are committing to offset carbon emissions with intent to become carbon neutral as soon as possible. Companies with a commitment to climate action can incorporate the following CSR practices into their business:
- Make green electricity purchases from new wind and solar farms around the world
- Work energy efficiency (such as decreasing total electricity use) into every aspect of business operations
- Create carbon offsets for “unavoidable” CO2 emissions
- Educate your consumers regarding the issue – for example, Pukka Herbs encourages tea drinkers to be energy conscious when boiling water
The overall aim of any CSR activity should focus on how your business can improve rather than remove from society. If you would like more information about how your business can improve social issues such as the environment, mental health, and children’s lives, you might enjoy our previous post.
CSR and Your Bottom Line
We have already established, what CSR is, and how it can be incorporated into a business strategy. Now, let’s get down to the nitty-gritty. How can businesses make a profit by incorporating CSR into their business model? Yes, a robust approach to CSR correlates to your bottom line. Findings show companies that integrated social impact into their business strategy were able to increase sales by as much as 20%. The push for CSR does not end with the consumer.
A new form of capitalism has arisen, which is driven by socially conscious consumerism, making CSR efforts of increased concern to potential investors. To put this in perspective, $22.89 trillion of assets are now linked to responsible investment strategies globally. Multinational corporations like Amazon and Walmart (alongside one-third of the global banking industry) have responded to these growing market trends by making a strong and clear commitment to CSR. Smaller organizations must follow suit if they hope to stay competitive in an increasingly socially conscious marketplace. CSR can bolster the overall public image of your company as Katie Schmidt reiterated to Business News Daily:
“What the public thinks of your company is critical to its success…By building a positive image that you believe in, you can make a name for your company as being socially conscious.”
Katie Schmidt, Business News Daily
The public perception of your brand can make or break a reputation, and a damaged reputation can be nigh on impossible to overcome without the right strategies in place. By building your brand upon a solid foundation inclusive of corporate responsibility, you can protect your reputation and negate the market risk. Whether it be clear to your business now, the purpose of a corporation is to care for all stakeholders. Now is the time to build a socially conscious business from the ground up.
If you would like to know how Useful Views’ competitive philanthropy strategy could help to improve your business, please don’t hesitate to connect.