Corporate social responsibility or CSR, is exhibited when companies pair social concerns with their business operations. They might initiate, participate in or support causes that benefit the communities they operate in.
CSR is not a new concept and dates back to the industrial revolution where steel and oil companies were the few large employers. While it is entirely voluntary, it has come to be expected from companies and some have excelled at it. An example is the multi-national company Johnson and Johnson who have committed to using renewable energy in their production processes as allies of the environment.
There are several approaches to corporate social responsibility
The environmental approach
More than cleaning up the waste they create, with the environmental approach, companies work towards methods that cause less harm to the environment. It can also see companies giving financial support to organisations that work specifically in the field of environmental protection.
The community approach
This approach works under the premise of ‘giving back’. The community supports the company by buying their product or service so it does the same by solving issues faced by the community. This can also see the company employees being actively involved in these activities be it a blood donation drive, a charity walk or a clean-up.
The philanthropic approach
Here, companies donate money to organisations or charities either locally or internationally. Sometimes the philanthropic endeavors will tie into one of the values of the business and sometimes they will be chosen according to a different set of criteria.
In the process of doing good for others, businesses themselves can benefit from corporate social responsibility in the following ways.
An improved image
Critics of CSR say companies are not doing it out of true altruism but in a bid to correct their own image. However, done ethically and with authenticity, companies can bypass that criticism and improve their image in the eyes of the public. Here’s how:
First, don’t toot your own horn. Let the beneficiaries speak up, otherwise you might be looked at as just doing the work to get PR points. Secondly, react to crises. It is normal to have a CSR plan, but life is uncertain and accidents happen. Being seen to help when the community or someone in it unexpectedly needs a hand can change your image from one who uses corporate social responsibility only for the cameras to a company that truly cares.
It gives a new way to engage with customers
Companies are always looking for ways to sell to their customers; giving them a new message through CSR can create a different and unexpected way of engaging with them. If ran the right way, a corporate social responsibility campaign will land on something customers actually care about.
Doing this will show that the relationship with customers isn’t just buyer-seller, only composed of them buying from the company. By caring about something they also care about, companies stand to increase customer loyalty.
As a plus, it can also attract new customers. Customers are attracted to companies that they view as good and responsible. Research and surveys show that consumers consider CSR as a factor even before price when it comes to purchase decisons. As such, they would pay more for goods from socially conscious businesses.
Increase employee morale and engagement
Doing good for the community through CSR also has an impact on employee engagement. Even if employees are not actively involved in the CSR initiatives they will be proud of the work and this can have a direct impact on performance.
It can increase morale and also reduce turnover because employees get a sense of purpose from working for a company that is contributing to a good cause.
Improved team dynamics
Doing good feels good, doing good as a team can feel even better. CSR can give the team a chance to bond outside of the office. During the day to day at work, stress and deadlines might interfere with people getting to know each other and how well they work together.
Whether it is a fun run to help raise funds for a clinic or renovating a shelter, your team will be doing it together. People will have a chance to show case skills they don’t ordinarily use at the office and this can create a better appreciation for each other, build trust and improve communication. This will all go back to improving performance at work.
Certain corporate social responsibility choices can result in reduced costs for companies. Choosing to use less energy, package in environmentally conscience ways and use renewable energy might see companies actually spending less in some areas. By creating a more environmentally friendly bottle, Nestle was able to reduce its cost on packaging and shipping.
Other companies find their marketing and advertising budgets getting smaller because their CSR activities generate press for them. CSR can become a way that they advertise.
CSR is not just good for current employees, it is a great way to attract new talent. The workforce today is not just attracted by a high salary, they are attracted to employers who are socially conscious.
In an employee engagement survey, 88% of millennial respondents said they would be more fulfilled at a job if they were given an opportunity to participate in improving social issues. A strong CSR culture can help businesses not only recruit top talent but also retain them for longer.
It puts sustainability at the forefront
Corporate social responsibility is good for businesses because it makes them think about the long term. When companies consider CSR, they are seeking to protect the future of their businesses. Whether or not a company will perform in the next 10 years is something they can secure in the present by looking at their carbon foot print and how they can best support their consumers.
Corporate social responsibility is a way for companies to genuinely give back and help communities. Luckily, a by-product of helping society is that companies benefit as well.