What is corporate social responsibility (CSR) and how does it apply to my business? Q&A
Q: You might call me "old-school" but my board has started pushing a CSR agenda. Frankly, I am wary of adopting what seems like philanthropy at the expense of my bottom line. What are your thoughts? Are there measurable business benefits to CSR?
A: I do understand your hesitation. However, when companies of the stature of M&S, Unilever, Coco-Cola, Puma, Microsoft and Nike – to name but a tiny fraction – have embraced CSR, you can be sure they are not doing it because it is bad for their bottom line.
The main responsibility of corporations used to be the generation of profits at any cost. Even today, there is zero point in a business behaving responsibly if, in so-doing, it puts itself out of business or generates less profit. That's why corporate social responsibility aims to contribute to profit, rather than being a net cost.
CSR initiatives can be approached from multiple perspectives, depending on your operations:
- Environmental – focusing on ecological concerns; from recycling to improving your organisation's entire carbon footprint
- Community-based – supporting local community projects to improve lives of the people local to your organisation; financially or through volunteer programmes
- Internationally – focusing on issues such as fair trade, sustainability, working conditions, child labour and human rights
- Workplace-based – focusing on improving the rights and well-being of your staff; reviewing issues including remuneration, recruitment, induction, health and safety, whistle-blowing, working conditions, diversity and training
All very well and good, I hear you say! But can these socially responsible practices make actual business sense? The good news is, they can. Here are the main, measurable advantages:
Cost reductions: CSR initiatives don't have to be a cost. On the contrary, they can help reduce costs. Operational efficiencies can be achieved through streamlining, sustainability and energy saving. Waste can be reduced and materials recycled. These eco-efficiencies can produce both environmental and economic benefits through reductions in energy consumption, implementation of new cost-neutral building maintenance methodologies, and decreasing the cost of workspaces generally. Another advantage is that occupants of greener buildings may be healthier and more productive in their work.
More productive employees: CSR initiatives have a positive impact on employee wellbeing and motivation. They can, and do, contribute to the ease of hiring quality staff, employee retention, commitment and motivation, all of which leads to increased innovation and productivity. Employees want to feel proud of where they work. An invested employee is less likely to look for a job elsewhere. More good people want to work for companies who do not take their staff for granted. More hiring choice ultimately means a better workforce. Front-line employees are also best placed to identify inefficiencies and propose improvements.
Enhanced reputation at less cost: Pragmatically, there's no point in adopting CSR if no one knows about it. As CSR improves your organisation's reputation as more responsible and sustainable than your competitors, this improves your ability to be more effective in the way you manage communications and marketing to reinforce existing customers, attract new customers and increase market share. CSR can help you engage with your customers in new ways on and offline. With a good PR mind at work, you may find less need for expensive advertising campaigns as you generate free publicity and benefit from positive worth-of-mouth.
Content communities: CSR involves the way that an organisation engages and collaborates with its stakeholders, which include not only your shareholders, employees, suppliers and customers, but also the community in which you are based and operate. By getting involved in your local community and maintaining an open and honest dialogue with them, you can create and foster a credible and trusted relationship, enhancing your support over the longer term.
Happier, more loyal customers: CSR makes customers think more highly of you. If customers like and admire you, they are likely to buy more products or services, will share their enthusiasm with friends and be less willing to change brands. The UK Small Business Consortium reports that "88% of consumers said they were more likely to buy from a company that supports and engages in activities to improve society."
Improved access to capital: an ever-increasing number of investors in business now factor CSR criteria into their selection processes to include socially responsible companies and exclude those that do not strive to meet certain environmental and/or social standards. So CSR can improve your organisation's stature in the eyes of the investment community, and thereby your ability to access capital from them.
Organisations that haven't already embraced CSR may still be considered industry leaders but not for long. CSR is already measurably influencing employee, customer and stakeholder preferences.
It has never been more the case than now: with a knowledgeable strategic approach and committed leadership, CSR can contribute to a truly significant ROI.
Align Your Recruitment Efforts With Your Core Values
Today’s workforce demands more social responsibility from corporations, and many top tier workers demand that their employers show a high level of responsibility in their community and globally. While it shouldn’t be your core reason to do so, embracing CSR initiatives will help you attract high caliber candidates. Find your next key contributor today with a free listing on Monster.