Whether it’s by participating in charitable events, encouraging employee volunteering, or contributing to a cleaner environment, companies that take on socially responsible roles are more globally respected, financially successful, and attractive to top talent.
That’s because socially responsible companies realize that their business practices affect not only their bottom line, but also their employees, customers, local communities, and even human rights.
The United Nations Industrial Development Organization describes some of the common functions of corporate social responsibility (CSR) as including:
- Responsible sourcing of materials and supplies
- Employee, vendor, customer and community engagement and relations
- Adherence to labor standards
- Environmental protection and management
- Anti-corruption measures
- Upholding social equity, gender equity and other human rights goals
- Conservation of resources, like water and energy, in production
In their Global Human Capital Trends 2018 analysis, Deloitte states: “Organizations are no longer assessed based only on traditional metrics such as financial performance, or even the quality of their products or services. Rather, organizations today are increasingly judged on the basis of their relationships with their workers, their customers, and their communities, as well as their impact on society at large – transforming them from business enterprises into social enterprises.”
Some fascinating figures have emerged from recent studies of the results of CSR:
- 67% of employees prefer to work with socially responsible companies
- 70% of millennials say that a company’s commitment to social responsibility influenced their choice to work there
- 55% of consumers will pay extra for products from companies committed to positive social impact
- $17.8 Billion was given to charities in 2017 by socially responsible enterprises.
How CSR benefits companies – and employees
Cost savings: Sustainable business practices can benefit a company’s bottom line as well as the environment. Operational efficiencies can be achieved through reducing waste and recycling materials. Eco-efficiencies like these produce environmental and economic benefits through reductions in energy consumption, cost-neutral building maintenance systems, and decreased costs of workspaces. Another (big) plus is that employees in greener buildings tend to be healthier, happier, more productive, and more engaged.
Enhanced branding: CSR is a fast track to an improved reputation for any organization, as it shows that the organization is more responsible and sustainable than its competitors. A dedication to social responsibility allows companies to convey more powerful, more pertinent messages that can help retain existing customers, attract new ones, and increase market share. CSR can help companies engage with customers in new, exciting ways, both on and offline, even reducing the need for expensive advertising campaigns as free publicity and positive worth-of-mouth are generated.
Increased employee loyalty: When employees feel that their organization is socially responsible, they experience a greater sense of identity with the business they work for. In fact, social responsibility can be more important than financial success in determining how much employees identify with their workplace. CSR initiatives make attracting top talent easier while improving employee retention and commitment. And commitment covers a wide range of positive attitudes, including how much employees like their organization, how willing they are to make personal sacrifices for it, and how closely they feel their own future and success are tied to that of the organization.
Increased creativity: CSR can also boost employees’ creative involvement with their companies, motivating them to generate practical, sustainable new ideas and solutions aligned with their organizations’ goals. If employees are involved in socially responsible initiatives, originality and innovation are fostered. And when organizations express their values and passions through CSR, employees may be inspired to develop new and better ways to do their work.
Better customer engagement: Strong customer relationships are the foundation of any successful enterprise. Practicing meaningful CSR initiatives can have a profound impact on the buying decisions of customers. Many are willing to pay more for products if they know part of the profit is going to a worthy cause. And companies that are active in their local communities – for example, by supporting local charities or helping the less fortunate – will be viewed positively by the community, which can lead to increased sales and higher profits.
Corporate social responsibility is good business – for companies, employees, customers, and communities. We are living in an era when customers vote with their dollars and hold companies accountable for their broader actions in the world, and the companies that recognize this truth are certain to be more successful than their competitors.