CSR Strategy and The Value it Brings to the Business
People know that the resources in this world are limited. They have also begun to realize how intertwined we are not only with each other but also with nature. This awareness has brought forth a new interest in corporate social responsibility. Many people, from customers to investors, want to know about the corporate social responsibility of a business before committing themselves to deal with that company. Where does your company stand on this critical issue, and where can you improve?
What Is Corporate Social Responsibility?
Corporate social responsibility is defined as what a company does to make sure its operation enhances the environment and society. For a company to be socially responsible, it needs to be accountable to both itself and the people it serves. By setting these ethical standards, a company gives the message that it cares about more than just money.
Types of Corporate Social Responsibility
Corporate social responsibility isn't just one thing. Social responsibility covers many different areas and often a combination of areas within the same corporation. Much about how a company exhibits its social responsibility will be based on the location, what their company goals are, and what the area most needs. You can also tell a lot about the values a company holds by where they concentrate their efforts.
Environmental Sustainability Initiatives
A paper manufacturer commits to planting a tree for every so many they cut down. A cleaning supply company uses only non-toxic chemicals in its products. These are just two examples of environmental sustainability initiatives. Others might include contributing to environmental agencies that work with creating alternatives to plastic. When a corporation commits to ecological sustainability, they make it their mission not to tax our natural resources to the point of extinction, and they look for ways to thrive while creating as little impact upon the world as a whole in regards to the air, land, and water.
Philanthropic activities most often involve giving back to the community. A smaller business might sponsor the local Little League team. Other examples might be an annual holiday dinner for the homeless that a restaurant offers, donations to organizations such as women's shelters or food banks, or revitalization projects like community gardens in distressed areas of the city. While major corporations may donate on a large scale, most philanthropic activities take place within a specific field, such as a city or county that houses the company's headquarters.
Ethical Business Practice
Ethical business practice is something that most people consider essential regarding the companies they deal with regularly. These practices can be as simple as treating employees fairly by paying a living wage and offering benefits that help smooth any hardships, such as family and maternity leave and health care. They can be more "obvious" such as not hiring illegal immigrants or children and paying them a lower wage than they deserve, or making sure factory conditions are safe. Ethical practices can also mean local sourcing products rather than sending business overseas. Local sourcing helps keep the money in the area where it is needed.
You are in business to make a profit. That is what every business has as its primary goal. The way you make that profit and what you do with it has a lot to do with your economic responsibility. Are your prices in alignment with what you spend? Consider places like big pharmacies where they can produce a life-saving medication for pennies yet sell the medicines for hundreds of dollars. This practice lacks economic responsibility. Another way that financial obligation can present itself is in how willing you are to share your profits with employees, such as with yearly bonuses or raises when possible. The best way to determine if you are economically responsible is to ask yourself who benefits when you succeed? The answer should ideally be everyone involved in the business.
What It Brings In Terms Of Business Value
Setting up a policy for corporate social responsibility must be taken seriously. There are many factors to consider when taking on this task. Consider the following factors when developing your social responsibility plan.
Balances The Economic Value With Societal Value
A good corporate social responsibility program balances the economic value with societal value. We already spoke of how a company needs to make a profit. Does the policy you have in mind help reflect the amount of profit you make in terms of scale? You can think of this in terms of the old story about a millionaire giving a homeless man twenty dollars and another homeless man giving him five. To the millionaire, that twenty dollars is considered minuscule in comparison to what the person makes. To the homeless person, however, that five dollars may be all he has for his next day's meal. It means far more to him. Make sure your policy is in line with what others expect is reasonable.
Develops Sustainable Business Initiatives
A good plan will be sustainable. Developing initiatives that can't withstand time will end up making your company appear undependable. Make sure you understand that any program put into place is there for the long haul.
Focuses On Philanthropic Activities
Any socially responsible plans will be more productive if they include philanthropic activities. Consumers like to know that their money is spent to benefit their families and their community. Charitable activities will serve that purpose.
Improves The Business Model
People want to do business with businesses who care, and if you are focused on caring, there’s a good chance business will reflect your efforts. When you can show benefit within your business model, you pique the interest of investors and make working within the company more appealing to potential and current employees. Everything about the company model appears higher in value.
Creates Financial Value For A Company
Well-developed corporate social responsibility plans create value for the company by creating greater consumer interest, higher employee satisfaction, more investor involvement, and a multitude of other ways. By taking the time to plan well, you can create financial value for your business that goes well beyond what income is flowing into your bank account.
Higher Brand Loyalty
Consumers are creatures of habit. When they find a brand they like, the consumer will stick by that brand as long as possible. When the company has a reputation for being socially responsible, this appeals to the consumer and makes them feel good about staying loyal to the brand. This loyalty translates into more return business as well as referrals and general word of mouth endorsements.
Enhances Company Reputation
Reputation can make or break a business. People do notice how you treat your employees, how you attempt to protect the environment, and how you enhance the quality of life overall in a community. The more areas you can include in your social policy that speaks well of your business in these areas, the better your reputation will stand with the community and consumers in general.
Gaining Goodwill With Stakeholders
Stakeholders are only as strong as their belief in the company. If you want to make sure your investors and others who benefit from your business are happy, increase your corporate social responsibility. Make people proud to be part of this business. You want stakeholders that work for your success, not ones that sit idly by and watch you do all the hard work. If these people are proud, they will do all they can to help you reach greater heights.
Develops Employee Qualities And Leadership Skills
By incorporating social responsibility into your company policy and mission statement, you attract the kind of employees who align with these beliefs. This alignment allows the employees to grow and become leaders in both your company and society in general. Make them proud to say they work for you. Give employees a reason to come to the office and give their all every day. Making this happen will see your company fill with positive, high-skilled staff that help you succeed.
Manages Risks Of Negative Publicity
Managing negative publicity can be problematic. You want to concentrate your social responsibility efforts on things that align with the company's core values. Yet, you want to make sure those core values aren't questionable in the eyes of a large portion of the population. Look ahead and ask yourself if there is a chance that one of these values may come into question in the future. Companies today are facing the loss of reputation by supporting things that can be deemed systemic racism or are considered anti-LGBTQ+. It is best to avoid aligning yourself with any specific religious or political stand unless you are willing to risk negative publicity should current opinion take a turn. Stick with things that will keep you on the positive side of social issues whenever possible.
Higher Employee Morale And Engagement
The higher your employee morale, the greater the productivity within your company. When your company's social responsibility is high, employees are happier. They feel that their job matters and that the company they work for cares. By allowing employees a chance to be part of that effort, you increase involvement not only in the projects you support but in the company in general. Take, for example, the company that sponsors the local Little League. You could encourage coaching efforts from your employees, arrange a day where you pair up players with an employee for a field trip or a day at work, or arrange a holiday gift program where your company "adopts" a child on the team.
The Basic Concept Of CSR
The foundation of corporate social responsibility is for the company to operate in such a way that the environment and community are enhanced but never harmed in any way.
First and foremost, a corporation should be responsible for people. People include stakeholders, employees, and the community at large. This responsibility starts with stakeholders when you first present your corporation on paper and seek investors. Start with transparency. Next, treating employees in such a way as to show their value is essential. Lastly, be an asset to the community you serve. Serving the community includes providing employment, taking care to bring no harm to the people of the city, and giving where possible to enhance the area.
Corporation's responsibility to the planet includes things like not wasting limited, natural resources, not dumping hazardous waste into the environment, and protecting the air around you. This responsibility can cover the way you manufacture your product, how you package the product, advertising, and sourcing material to make your product. It all combines to leaving as small a footprint as possible and even leaving the environment in better shape than it was for future generations.
How profitable is your company? Here we are not speaking solely about the profit your books show each year. Ask yourself what you bring to a community in the way of sustainable employment. Are you considered one of the best places to work for in the area? Can your employees live decent lives on what they bring home throughout the year? Ask about the value your stakeholders receive in the way of both money and reputation. Lastly, what value do you add to your community?
Connecting With Communities
CSR initiatives allow you to connect with the community. It also contributes to the long-term employee pipeline. Your company isn't a solo entity plopped down in the midst of nowhere. The business is part of the community as a whole. The company either adds to or subtracts from the value of that community. If you can make the company an integral part of the area, this creates a never-ending supply of long-term employees who want to work for you. This employee pool can include international employees who may willingly relocate to be part of your corporation. You will benefit from having access to the best of the best.
Incorporating CSR Initiatives In Your Company Culture
When seeking out corporate social responsibility projects, look first at your company culture. Do you pride yourself on being a family-run company? What kinds of things are you and your employees interested in helping? What are some of the favorite causes your employees support? All of these answers will help determine where you can invest time and resources.
A family-based company might look at things like youth sports or community centers that can give kids a safe place to spend time. You might consider education and offering scholarships or some type of summer internship program. Maybe your community has recently been struggling financially due to other businesses closing or a natural disaster. This situation might be an excellent time to work with food banks, homeless shelters, building homes, or investing in some local small businesses. Maybe a long-time employee has recently lost someone to a medical issue that still needs research done. Invest in that. Make your mark where it is most valued by those within the walls of your company.
Integrating CSR Plan With Your Company Goals
In addition to looking at your company culture, take a look at your goals as a company. Most companies start because the person who has the idea has a goal in mind. Rarely is that goal merely making money to spend. Was your company initiated to make an area of life safer or more comfortable for specific individuals? Maybe the goal was to provide a particular type of opportunity lacking in the community, such as professional jobs that didn't depend on college degrees. Whatever your main goal was, don't lose sight of that as you set a plan in motion.
Communicating The Value of CSR To The Stakeholders
Communicating CSR will drive stakeholders' support and engagement and will help you anticipate their expectations. Having this goal upfront and visible from the beginning will give stakeholders a reason to want you to succeed. Your CSR plan will speak to their hearts as well as their minds. All of this effort will show itself in the support you receive in many ways from those who can help.
Take One Step At A Time
Take baby steps in implementing CSR strategy because no matter how small the effort or initiative is, it can make a difference and a significant impact in the social community. Starting small helps you establish a strong base from which to expand later, as the company grows. Planting the seed now will allow you to realize the protective benefits of a robust and healthy tree with many branches as the years continue.
Improving your company culture will improve employee retention.
Read more about it in our article:
How to Improve Company Culture: 5 Tried and Tested Ways
This blog post is intended for informational purposes only and does not constitute legal advice. No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice. Readers are urged to consult legal counsel when seeking legal advice.