More consumers than ever are demanding that companies change the way they do business, become more transparent, and take an active role in addressing social, cultural, and environmental issues. Corporate Social Responsibility (CSR) has taken its place in today’s corporate world, and businesses that ignore it do so at their own peril.
What is Corporate Social Responsibility (CSR)?
Corporate Social Responsibility means that a company takes steps to ensure there are positive social and environmental effects associated with the way the business operates. Businesses that engage in active CSR efforts take stock of the way they operate in the world to incorporate addressing cultural and social issues, with the aim of benefiting both in the process. Not only can CSR models increase business and revenue, they promote change and progress throughout the world, which often involves helping people with few or no resources.
CSR is viewed as different from philanthropy. When properly implemented, it should become ingrained in the values and culture of a company, and positively affect the way the company does business. CSR should become inherent in the mission and message of an organization, and also hold a strong place in marketing and advertising. Companies should be aware that promoting their CSR model only benefits the company if they are already acting on their plan. Otherwise, falsely claiming to bring social change to those in need could lead to bad publicity.
Businesses that ignore corporate social responsibility run a risk to their bottom line and their brand. Having a bad reputation socially and environmentally can create serious negative effects on the overall profitability and success of a company, as nowadays consumers want to spend their money on products and services that they believe in, and engage with companies that follow ethical practices that meet their own beliefs.
Companies with CSR models
The Coca-Cola Company’s CSR program known as 5×20 has the goal of employing five million women in developing countries by 2020 in both bottling and distribution roles. This goal will not only benefit the women in the communities surrounding Coca-Cola manufacturing plants but could also benefit the communities as a whole, as the company aims to provide better access to health care and improved education to their employees.
The corporate social responsibility model implemented by Visa provides financial opportunities for people in developing areas of the world. By partnering with local governments and nonprofit organizations, people who previously did not have access to the benefits of banking and financial services now do. The Gates Foundation found that this type of service helps low income and poor people manage their finances in trying times, build assets, and increase connectivity worldwide.
On a smaller scale, there are entrepreneurial companies known as B Corporations employing CSR into the very fabric of their own businesses. Their missions are threefold: people, planet, and profits. The “B” refers to beneficial, and thirty-one states in the U.S. currently recognize B Corps. These businesses are required by law to meet strict standards of social and environmental performance, with companies like Seventh Generation, Pura Vida, and Etsy great examples of B Corps.
The Importance of CSR for Millennials
As the millennial consumer population grows, it is critical that companies consider their corporate social responsibility status. Instilling a model of social responsibility is necessary for attracting what is becoming one of the largest market segments. Millennials are particularly tech-savvy, and they don’t think twice about researching a company and looking into its ethical record and labor practices. Many feel like it is their duty to do their part in making the world a better place, and this burgeoning generation does not want to be associated with or support companies who do not take responsibility for the world and the people in it.
Employee engagement is also tied to a company’s CSR reputation. A recent Deloitte survey found that 70 percent of millennials acknowledged that a company’s commitment to social responsibility influenced their choice to work there. With millennials soon to be the largest generational segment of the workforce, companies looking to hire these workers will need to embrace CSR in order to attract and retain talent. Millennials don’t just want to consume products and services made by companies that have a CSR presence; they want to take part in making these social and environmental changes also.
Conclusion
Corporate social responsibility is more than just a business trend or fad. Businesses that want to stay relevant to new generations and who want to help people in need around the world while increasing their own revenue and efficiency will benefit from embracing CSR.
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Recommended Readings:
Ohio University Blog, “The Fundamentals of Corporate Change”
Ohio University Blog, “The Importance of Culture to Business Success”
Ohio University Blog, “Types of social interactions businesses might encounter”
Sources
Time Business, “Why Companies Can No Longer Afford to Ignore Their Social Responsibilities”
Forbes, “Attracting Talent Through Corporate Social Responsibility: 3 Myths Debunked”
Entrepreneur, “7 Steps to Up Your Corporate Social Responsibility Game”
Investopedia, “Corporate Social Responsibility (CSR)”
Benefit Corporation, “State-by-State Status of Legislation”
