The world is becoming increasingly aware and conscientious of businesses' effects on society and the environment. Many companies are beginning to implement Corporate Social Responsibility (CSR) programs in response to this.
CSR is a broad term encompassing various ways a company can give back to society, often through charitable donations or environmental initiatives. But does CSR actually work? Are companies doing it simply to improve their public image, or are there real benefits to society?
Why Does a Company Take Part in CSR?
There are a few reasons why a company might want to get involved in CSR. If we can decipher the benefits a company manages to reap from partaking in CSR, we can better understand whether it is a practice that actually works.
The most common reason is to improve their public image and reputation. Since consumers are becoming crescively aware of their impact on the planet, they are increasingly likely to purchase from companies they assimilate as "good corporate citizens." In other words, companies that are seen to be taking steps to improve the world are more likely to get the consumer's attention and hence, money.
Another reason companies might take part in CSR is to attract and retain employees. It is especially true for millennials, who are often drawn to companies with a strong social conscience. Companies also chirk up their employees to participate in CSR programs to motivate them.
Finally, some companies genuinely want to make a difference and see CSR as a way to do that. While this might not be the primary reason for every company, it is undoubtedly a factor for some.
The Essential Elements of CSR:
Corporate Social Responsibility is segmented into four categories: environment, human rights, philanthropy, and workplace.
Each company's CSR program will look different, depending on which area(s) they choose to focus on.
However, all successful CSR programs have a few things in common:
* A clear purpose: The company's CSR program should align with its overall mission and values.
* Measurable goals: The company should have specific goals that it hopes to achieve through its CSR program.
* Engaged employees: The employees should be on board with the CSR program and feel like they are playing an active role in achieving the company's goals.
* Communication: The company should be transparent about its CSR program, both with its employees and the general public.
When done correctly, CSR can be a win-win for everyone involved.
The Myths and Misconceptions:
Frequently, CSR is met with skepticism and cynicism. Some people view it as a way for companies to simply improve their public image without doing anything to benefit society.
Other people believe that CSR is nothing more than a PR stunt and that companies' money on these programs would be better spent elsewhere.
Finally, some people believe that CSR programs are nothing more than a way for companies to avoid paying their fair share of taxes.
There are many misconceptions about CSR, so let's take a look at some of the most common ones:
Myth #1 CSR is Only for Big Companies
Fact: Any company can implement CSR programs no matter its size. While it's true that large companies have more resources to devote to CSR, there are many ways for small businesses to get involved. For example, a small business could donate a percentage of its profits to a local charity or sponsor a community event or recruit people with disabilities to show that they're an inclusive employer.
Ceridian HCM, Inc. is a company that provides human resource management software and services in countries like Canada and Australia. Because they deal with HR, they know how handicapped individuals are disadvantaged. As a result, they have chosen to acquire the resources required to bring people with disabilities into the mainstream. This company has given back in many ways, from hosting mini-marathons to volunteer days near schools.
Myth #2 All CSR Initiatives are Purely Philanthropic
Fact: While some CSR programs are philanthropic, many also have a business angle. For example, a company might sponsor a clean-up day in a local park. It benefits the community by making the park cleaner and improves the company's image. The company can then use this enhanced image to attract more customers or talented employees.
Walt Disney donated around $27 million toward food and PPE during COVID-19. They also encouraged their employees to actively volunteer during the pandemic. As a result of their efforts, the company's image has significantly improved, likely leading to increased profits.
Myth #3 CSR is Expensive
Fact: While some CSR programs can be costly, there are many ways to give back without breaking the bank. For example, a company could allow employees to use paid time off to volunteer at a local charity. Or they could offer discounts to customers who use environmentally-friendly products.
In recent years, Ben & Jerry's has been working hard to implement sustainable practices into its business model. They've done this by using recycled materials to make their ice cream tubs. They've also started using more environmentally-friendly packaging for their products. While these changes have cost the company money, they've also saved them money in the long run.
Myth #4 It's Too Complicated to Plan CSR Initiatives
Fact: There are many ways to get started with CSR, and there are plenty of resources available to help companies plan their initiatives. One way to start is by simply asking employees what causes they're passionate about. Or a company could look at the UN Sustainable Development Goals and choose one or two to focus on.
There are many software companies out there, but not all of them are as socially responsible as they could be. One company that is doing its part is HubSpot. They offer free CRM software to nonprofits to better manage their donations and track their progress. They also offer discounts on their products to social enterprises. As a result, they can help those working to make a difference in the world.
Myth #5 Investors Don't Care Much About CSR
Fact: While it's true that some investors don't consider CSR when making investment decisions, there is a growing movement of impact investing. This is where investors put their money into companies working to solve social or environmental problems.
There are various compelling reasons why an investor might choose to invest in a company with good CSR practices. For one, it shows that the company is committed to making a positive impact on the world. It can lead to heightened customer loyalty and employee retention. Additionally, it can help the company attract new talent and investors.
The future of business is social responsibility. Consumers are more likely to associate themselves with and invest in companies they perceive as socially responsible. And as companies realize the importance of holding firm ground in the ever-evolving digital world, many are turning to corporate social responsibility (CSR) to improve their image and bottom line. Hiring individuals with a focus on CSR can be a key differentiator for these companies.