Increased globalization has meant that the world’s markets operate within a village environment, and the consequences of any actions are felt universally.
So that an effort is made to enhance society and the environment, rather than degrade it, global businesses can subscribe to a self-regulating business model called Corporate Social Responsibility – CSR. This provides a framework within which companies can consider the impact they are having on all aspects of society – economic, social, and environmental.
CSR is split into four main categories.
A company assesses its activities based on the environmental impact that they have and takes measures to reduce or mitigate any damage.
Philanthropic literally means seeking to promote the well-being and welfare of others. While many global businesses contribute to the modern world economically, there are still vast swathes of communities – both local and international, who struggle to get past the lowest rung of poverty.
Incorporating a philanthropic strategy ensures that not only does a company meet its CSR obligations but can allow it, employees, to nurture their own sense of purpose and self-worth by actively participating in charity focussed activities.
Human Rights Responsibility
A company ensures that its own, and those of its suppliers, carry out its people policies within the framework of human rights, fair pay, eliminating child labour, and ensuring all processes are founded on equality and diversity.
Subscribing to being responsibly economically will ensure that you as an organization grow in a way that is economically viable while still maintaining sustainability on a local and global level.
As a self-regulating business model, it is only natural to question what the motivation is behind a company implementing CSR – it does after all involve a significant degree of investment and might involve selecting the ‘not the cheapest’ option in order to meet certain criteria.
Well, there are a number of benefits that will have a long-term positive impact on your business.
It puts you in a positive light with customers
Recent studies have highlighted how more than 50% of consumers would be more inclined to pay a premium for a product o service from a CSR-registered company, and beyond that, 87 percent of Americans said that they would actively choose to buy from a company that aligned with their values – even if it was more expensive than a competitor.
So in brief, a CSR:
- Has a positive emotional impact on your brand values.
- Helps nurture customer loyalty.
- Adds a premium element to your product, which is reflected in the price.
You become more ‘investable’
Any investor worth their salt will check your CSR credentials these days. Faced with a choice between investing in a CSR-aligned company, and a non-CSR-aligned company, an investor will always go for the CSR option. An essential element of this is the sustainability element of any CSR. One report highlights how global sustainable development is currently valued at $30 trillion. With no CSR strategy, you will not even get a crumb of this particular cake.
Improved employee engagement
Engaged employees demonstrate a 17 percent increase in productivity, are a fifth more profitable, and yet are 41 percent less absent. Incorporating a proactive CSR gives employees a greater sense of participation, responsibility, and purpose over and above their role within the company. With a demonstrable impact on productivity, this can only be encouraged.
It’s great for PR
Every single CSR initiative carried out within your organization is fodder for telling your brand story. It helps your company connect with communities and stakeholders on a human level, demonstrating that people do indeed come before profits (which ultimately leads to better profit anyway.)