Why You Should Care About Corporate Social Responsibility
BY: SHELLY-ANN WILSON HENRY, CEO & STRATEGIC COMMUNICATIONS LEADER
Today’s customers, shareholders, and top talent are aligning themselves with companies that give as much attention to social and environmental issues as they do financial matters.
Corporate social responsibility (CSR) has been a “nice to do” for many years. At the very least, many organizations have seen the importance of philanthropy – donating and supporting local and regional charities as a way of giving back. However, it has become imperative for corporate social responsibility initiatives to level up and become more structured, robust programs in recent times. Sophisticated buyers, shareholders, and top talent are zeroing in on organizations that exhibit the spirit of the triple bottom line (TBL) concept in their business. According to Investopedia.com, the TBL theory was coined in 1994 by management consultant and sustainability guru, John Elkington, who used it “as his way of measuring performance in corporate America. The idea was that a company can be managed in a way that not only makes money but which also improves people's lives and the planet.”
Customers care
Although the TBL concept has been interpreted in different ways over the years and used primarily as an accounting model, its spirit is even more relevant today. Treating financial, social, and environmental performances with similar importance levels has become integral in creating greater business value and achieving success. According to a recent Business News Daily article titled What Is Corporate Social Responsibility, recent research found that “63% of Americans are hopeful businesses will take the lead to drive social and environmental change moving forward, in the absence of government regulation.” And, “78% want companies to address important social justice issues.” Additionally, “87% [of Americans] will purchase a product because a company advocated for an issue they cared about, and 76% will refuse to purchase a company’s products or services upon learning it supported an issue contrary to their beliefs.” So not only are customers expecting more from companies, but they will spend based on their expectations.
Shareholders care
The same is true for shareholders, as investors are looking for companies that measure success beyond financial metrics. This article titled Why Is CSR Important For Investors mentions that investors view companies with an emphasis on CSR policy and program development as operating a higher standard of risk management and having leadership teams that recognize the materiality of non-financial issues. It goes on to say, “CSR is becoming more important for investors because they are more concerned about where and how their money is invested." Notably, CEOs/CFOs and business-minded CSR executives are collaborating to use effective frameworks that allow companies to achieve CSR objectives and create shareholder value at the same time. This article on CFO.com titled Shareholder Value and CSR: Friends or Foes explores cost-saving, revenue growth, and risk reduction as three possible categories for CSR activities with substantial business benefits.
Employees care
As some companies continue to struggle with employee retention, and others compete for top talent, CSR may prove to be a friend. There is no doubt that organizations can separate themselves from the pack by showing existing and potential employees that they care about people and the planet as much as they do revenue. There are clear indications that employees want to work for organizations that care about the things they care about and foster a culture of giving back to communities that they serve and people who are vested in their business success. This article titled Why CSR is the Secret to Increasing Employee Retention reports that millennials, who make up about half of the workforce, “not only are more likely to buy products from a company who is involved in issues that they care about but will also actively research what positions a company takes in regards to social issues and how much financial support they provide for those issues.” The article further reports that “81 percent expect corporations to make a public commitment to good corporate citizenship, more than 91 percent of the individuals surveyed said that working for a socially responsible company is important, and 75 percent of employees and job seekers expect their employers to support individuals and groups in need within the community.”
CSR has become one of three business imperatives that companies can no longer ignore. It is essential to develop more meaningful and productive initiatives and communicate them effectively internally and externally for greater buy-in and impact. We are here to help. Schedule a consultation, and let’s explore the value CSR could bring to your organization.