Whether you are an established company or a rising startup redefining the rules, the effect of corporate social responsibility (CSR) cannot be overstated.
This increasingly prominent concept refers to a company's social accountability not only to itself, but also to its shareholders and the public. Once implemented, corporate responsibility has a positive trickle-down effect to employees, to the environment, to the business itself, and society as a whole.
The Importance of Corporate Social Responsibility
Indeed, the latest consumer trends all suggest that socially responsible companies have a competitive edge, further illustrating how this approach can be advantageous.
With this in mind, here are seven reasons that outline the importance of engaging in socially conscious activities and policies, and how the adaptation of this self-regulating strategy can change the world of business – and, indeed, your business – for the better.
It Is Crucial for Your Employees
Understandably, employees prefer to work for businesses that treat them well and with respect. Therefore, within your own four walls, you can attribute your CSR strategy as a direct contributing factor to your team's morale and productivity. Word of how you treat your employees – be it good or bad – will inevitably make its way into the public eye, so it's in your best interest to demonstrate how your company is setting the bar for corporate social responsibility.
When you get this right, you will have a team of more energetic, emotionally invested, dependable, and loyal employees. Additionally, by exposing your commitment to fundamental human rights, you are more likely to draw in the very best candidates during future hiring cycles.
It Is Critical for the Environment
In every sense, we are aware now more than ever of the importance of taking care of our environment; therefore, as a business owner, you have both a social and corporate responsibility to do so. This means identifying how your industry is affecting the wider picture, such as a cosmetics company avoiding unethically sourced palm oil (a major factor in deforestation).
It's not just the planet that benefits, either. Companies that are paying particular attention to the environment have an increased chance of being covered by the media and having their services or products shared both verbally and online. This results in increased brand awareness and recognition amongst potential future customers and clients who were previously unaware of your company, and who were perhaps electing to spend their money on a competitor.
It Is Necessary for Humankind
Many consumers are becoming increasingly aware of the importance of ethics, including the treatment of workers at home and abroad. As younger shoppers – such as millennials and Gen Z – put increasing emphasis on corporate behaviour, companies are being forced to follow suit and shift toward sustainably sourcing their materials and ingredients. Other contemporary issues, such as child (or forced) labour, gender equality, fair monetary compensation, and workplace safety are also things that your company can look to tackle as part of a defined CSR strategy.
In 2019, consumers don't want to feel as though their purchases are a product of human misery; instead, they want to be socially conscious in their choices and feel that the company they are buying from are making a positive impact on the world.
It Is a Public Relations Win
Most people would agree that one of the qualities of a good leader is the ability to think about how their actions (for example, the sourcing of materials or treatment of the environment) will affect the world around them, be it positively or negatively. By carefully considering this and working towards the prevention of causing harm, it will become clear that your company's management consists of people who are socially responsible in their ethics, and who want to make a positive impact on the society that they work within. As a result of a positive reflection on your business' upper-level management, the company's public relations (PR) will also receive a significant boost.
It Will Benefit your Company Financially
Based on figures from a 2015 study by Cone Communications, 91% of global consumers expect businesses to operate responsibly, while 84% claim that they seek out sustainable and responsibly made products whenever it is possible. When considering statistics such as these, the importance of CSR becomes obvious not just in terms of helping the planet, but also in terms of financial success for companies that choose to adopt this strategy.
When your company proves its investment in ensuring that you are running in a socially responsible way, you will develop a sense of emotional loyalty amongst your customers as a result. This is because your brand and product will elicit a positive emotional response from your patrons.
It Sets a Strong Example
Upon seeing how successful your business is as a figurehead for social responsibility, other companies will recognise its importance and seek to adopt a similar brand strategy. Without having to interact with any external establishments directly, you will be setting an example in business and serving as a role model to the ever-growing socially responsible world that we live in.
It Is Ethical
This is perhaps the most critical point here; as the name suggests, you have a responsibility to adopt and implement a CSR strategy. All people are accountable for the welfare and wellbeing of the world around us, but when you decide to launch a business, you then have an added sense of corporate responsibility too. Remember: no company is exempt from ethics, regardless of the industry that it operates in, who is working for it, or the products or services that are offered.
Implementing a CSR Strategy
Given its importance, how, then, can you implement your own corporate social responsibility strategy? After all, you want it to be authentic – not forced and awkward. To help, we've compiled a list of ways to efficiently and successfully implement your corporate social responsibility goals - and make a real difference in the process.
1. Install a Business Code of Ethics
In order for your business to possess some form of moral compass, it first needs a definitive code of ethics. How strict these guidelines are is up to you, of course; they can be the ten immovable commandments of your business, or simply a handful of philosophies that your company wishes to abide by when possible.
So, how do you compose one? Here are some actionable and practical tips for your list:
- Value-Based: A value-based code of ethics highlights the company's primary value system, utilising core standards of responsibility, integrity and quality assurance. Essentially, value-based ethical codes emphasise your self-regulatory efforts. For example, a restaurant might install a code of conduct that showcases your commitment to high-quality food and hygienic staff.
- Compliance-Based: Compliance-based code of ethics outlines the firm's dedication to complying with rules, regulations and laws put in place by any of the three levels of government. In addition to listing guidelines on how your enterprise will heed state mandates, your business, for instance, hires a compliance officer.
- Professional: If your organisation maintains a workforce of professionals, such as engineers, certified public accountants or attorneys, then you can adhere to standards put in place by industry leaders. A team of doctors must heed to a medical association, or a group of market researchers must follow the criteria established by a market research entity.
A code of ethics can be likened to a self-imposed gold standard of operating and serving in the marketplace for customers and employees.
2. Donate to Industry-Related Organisations
Consumers appreciate businesses that donate a portion of profits or revenues to industry-related charities, either within the community or on the international stage. It suggests that they are giving back to society and that their brand has values.
While you can contribute funds to any non-profit you want, it would be more appropriate to send money to philanthropic outlets that are in your realm. For example, if you are in the food business, then you could participate in your city's food banks. Or, if you are in the apparel sector, then you can donate to causes that help give clothing to people living in poverty.
3. Attend Volunteering Events
Money is great, but another strategic endeavour is to put in some in-person time. Being on the ground suggests that you genuinely care for a particular cause, rather than just handing over cash, and can do a lot for your brand and your overall CSR strategy.
Maybe you could attend a volunteer-led event in your community one afternoon a month, such as helping at an animal rescue centre or raising funds to update a wing of a children's hospital. There are many worthy causes that desperately require volunteers, so you won't be short of options.
4. Go Green
The environment – specifically climate change – is a crucial issue that is dominating international discourse these days. Everybody is talking about going green, though adopting an environmentally friendly model is not nearly as universal a practice, especially in the marketplace. Since one of the main subjects of discussion pertains to the private sector being more socially responsible when it comes to Mother Nature, your business can therefore put your money where your mouth is and do what others in your industry fail to do.
Indeed, pursuing a green business model may not be as challenging as it first seems. Here are some ideas to get you started:
- Initiate an environmental audit to determine how much you waste and what solutions you can institute.
- Repurpose your goods from recycled material rather than virgin components.
- Slash your paper usage and transition to a paperless office.
- Erect recycling bins throughout the office place and encourage greener behaviour.
- Provide rewards and incentives for your employees for doing their part to help the environment.
Your company does not need to be a climate zealot, but it can still incorporate mechanisms that shine a spotlight on your environmental consciousness.
5. Enhance Workplace Health and Safety
Although you will have already adopted certain mandatory workplace health and safety programmes, you can take your CSR initiative a step further by going above and beyond what is required of you. You can aim to establish new protocols, systems, procedures and technologies that prevent accidents, protect your workers and eliminate injuries.
What also makes this an effective tactic is that it could potentially attract new talent to your workplace. If workers appreciate that you are making serious investments into their health and safety, then you do not need to worry about high turnover rates or low-quality candidates.
Remember, this does not only need to apply to heavy-duty work, such as on a construction site. You can improve white-collar working conditions, too, by investing in standing desks or better chairs.
6. Make Honesty Key in Marketing
Let's be honest: businesses can often exaggerate in their marketing materials. However, in today's age of hyper-connectivity and ultra-fact-checking, it is more difficult to get away with being dishonest – which is a good thing for truthful and trustworthy companies such as yours!
An underrated addition to your CSR initiative is to change your marketing techniques so that they truly reflect your corporate integrity. If the performance of your product or service doesn't align with your claims, then there are millions of social media users that will call you out, damaging your reputation and your credibility in the process.
7. Create a Task Force for Implementation
Finally, to convey to your customers, your employees, your investors (if applicable) and the public that you are serious about embracing corporate social responsibility, you can establish a task force for implementation. This allows your business to achieve its desire for change and reach its full potential.
Here is what you need to know to keep your task force on point:
- Appoint various employees to your task force, including a point-person who will be accountable for its oversight and coordination.
- Outline a clear mandate to avoid confusion and achieve the corporate objective.
- Monitor the task force's performance by planning, measuring and understanding the work being done.
- Create internal committees – if you own a large company – that can organise your overall strategy.
- Ensure that the task force engages with both employer and employee.
It is essential, however, that your task force does not take too long to achieve its goal, as this then suggests that you are dragging your feet – or that the group is not getting any work done. Where possible, set time limits that your team must adhere to.
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Though these points highlight the importance of corporate social responsibility, they are ultimately just the beginning of many conversations that need to be had on the subject. By adopting this self-regulating strategy into your own company's functioning, though, you can set about changing the world of business for the better, and setting an example of how other industries should — and eventually will — operate.
What do you think? Should smaller businesses be doing more in this regard? How does your company approach CSR? Let us know your thoughts in the comment section below.
Additional content provided by Andrew Moran.