A Business Imperative: Corporate Social Responsibility
This article was first published by The Paper of Miami County.
What if I told you there is a proven business strategy that positively impacts your bottom line, attracts new employees and increases customer loyalty? Given today’s tight labor market and fierce competition for customers, you’d be crazy not to at least consider it, right? Chances are you’ve heard of corporate social responsibility (CSR). However, you might not realize that in today’s competitive marketplace, it is more than a “nice thing to do.” There is a strong business case for CSR, and it packs a punch in terms of a company’s overall performance.
According to Investopedia, corporate social responsibility is “a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public.” It’s not by chance that this definition is provided by the world’s leading source for financial content on the web. You see, investors and lenders increasingly consider a company’s corporate citizenship as a performance metric. Likewise, today’s consumers demand that the brands they buy—and work for—have a strong social impact.
New Era of Business Metrics
The growing importance of CSR has led to the term “triple bottom line” which encompasses a company’s impact on profit, people and the planet. This expanded view of a company’s success beyond financials is also reflected in a formalized set of metrics dubbed ESG (environmental, social and governance). Morgan Stanley Bank recently conducted a survey that found that nearly 90% of millennial investors were interested in pursuing investments that more closely reflect the values they hold. In response to this demand, financial services companies including BlackRock and Vanguard have created ESG-focused funds.
Recognizing the increasing significance of social impact among all key stakeholders, a variety of companies have started to publish a CSR annual report that communicates their goals, actions and quantifiable impact. A few examples are the Walt Disney Company, CVS Pharmacy, and Comcast NBCUniversal.
Types of Social Impact Initiatives
Corporate citizenship takes on many forms, but the purpose is the same: to be a positive force in the world. The impact can be local, regional or global. Some companies focus on single area, whereas others spread their initiatives across different programs. Typically, corporate social responsibility initiatives fall into one of four categories.
CSR programs with an environmental impact often focus on sustainable business practices such as reducing the company’s carbon footprint or using sustainable sources for materials. Some companies opt to enrich the environmental by planting trees, funding research and supporting green causes.
There are a vast variety of social causes that a company can support including human needs (hunger, poverty, homelessness, health), community enrichment (arts, education, youth programs), human rights and diversity, equity & inclusion (DEI). Corporate social justice is a relatively new form of social impact that was sparked by social justice movements including Black Lives Matter, Me Too and Stop Asian Hate.
According to Harvard Business School, “Organizations that embrace ethical responsibility aim to achieve fair treatment of all stakeholders, including leadership, investors, employees, suppliers, and customers.” Ethical practices include pay equity, transparency in financial reporting and ensuring any international product sources pay a living wage.
The fourth type of corporate social responsibility pertains to making financial business decisions that are ethical and positively impact the environment and society.
The Business Case for Corporate Social Responsibility
CSR positively impacts a company in a number of ways. First, there is an immediate impact on current employee engagement and productivity. A recent survey released by Deloitte found that “when brands demonstrate humanity, employees are 2.6 times more likely to feel motivated at work.” According to Forbes, “CSR’s internal boost to company morale and productivity creates a workplace that is conducive to quality work.”
Research indicates that your ability to attract new employees, especially younger talent, might be dependent on how proactively your company embraces social good. The Gen Z Purpose Study by Porter Cone found that “90% believe companies must act to help social and environmental issues and 75% will do research to see if a company is being honest when it takes a stand on issues.” Their feelings not only impact the brands they buy, but their choice in employers. In a time when many companies are struggling to hire and retain talent, a corporate social responsibility program very well might tip the scales in your favor.
It’s not only Gen Z holding companies socially responsible. “Americans are more likely to have a positive image of (89%), trust in (86%) and be loyal (83%) to brands that lead with Purpose,” according to the 2019 Porter Novelli/Cone Purpose Biometrics Study.
According to a report by Aflac on corporate social responsibility, “77% of consumers say they would be more willing to purchase a company’s products or services if the company demonstrates a commitment to addressing social, economic, and environmental issues, [and] 73% of investors agreed.”
The bottom line is that companies that authentically embrace corporate social responsibility reap the benefits. Not only does CSR enhance a company’s brand image, it builds goodwill within the community, improves customer loyalty, attracts employees and leads to more engaged and productive workforce.
How to a CSR Initiative
Companies of all sizes use different criteria to select the CSR effort that is best for them. Some companies choose a CSR initiative that aligns with their corporate mission or purpose. For example, a pet food manufacturer might choose to support animal shelters. Other businesses focus on meeting the needs of the community where employees live and work. Local efforts can be hands-on such as dedicating a day for employees to volunteer at a local food bank or participate in a community cleanup, or monetary where the company and/or employees donate money to a specific cause.
The United Way of Miami County makes both types of localized efforts easy to implement. The nonprofit organization recently kicked off its 2021 United for Good campaign and is welcoming the support of industrial companies and businesses of all sizes.
“Corporate social responsibility is alive and strong in our community with 643 companies and businesses supporting the United Way of Miami County,” shared Debi Wallick, Executive Director of the United Way. “Participating employers love the fact that our organization is 100 percent focused on the local community and that we handle all of the logistics. Participation is turnkey and scalable to the size of the business.”
To learn more about incorporating the United Way of Miami County into your CSR initiatives, please contact:
Debi Wallick, Executive Director
Three Reasons Why CSR And ESG Matter to Businesses (forbes.com)
Social Responsibility: The Importance for Businesses (investopedia.com)
Six Steps to Building a CSR Program
The Triple Bottom Line: What It Is & Why It’s Important (hbs.edu)
2019 Porter Novelli/Cone Purpose Biometrics Study
Your CSR Strategy Needs to Be Goal Driven, Achievable, and Authentic (hbr.org)
Corporate Social Responsibility and the Rise of the Gen Z Worker - Workest (zenefits.com)
Top 4 CSR Trends to Watch In 2021 | EVERFI CSR
ABOUT THE AUTHOR
Melissa Hicks is a Board Member for the United Way of Miami County and the Founder and Chief Creative at Mosaic Marketing, a marketing and design agency that has nearly 20 years of experience providing results-oriented website design, graphic design, consulting, communications, and public relations. You can reach Melissa at email@example.com or 765.327.2015.