Learn what corporate social responsibility is, why CSR matters, pitfalls to avoid, and how to create a CSR strategy that doesn’t backfire.
As consumers gain access to more information about brands, they want to know more about the good they’re doing for their communities. Corporate social responsibility (CSR) becomes more important to consider than ever.
But corporate social responsibility initiatives can also come across as inauthentic or backfire. Let’s look at how you can craft a CSR program that’s true to your brand and backed by your employees.
What is corporate social responsibility and why does it matter?
77% of consumers are motivated to buy from companies that are committed to making the world a better place.
The United Nations defines CSR as integrating environmental and social concerns in business operations and stakeholder interactions. Why does CSR matter? An Aflac survey of 1,691 Americans found 77% of consumers are motivated to buy from companies that are committed to making the world a better place.
Employees also prioritize CSR. An August 2020 study by Porter Novelli found:
- 95% of employees believe businesses should benefit all stakeholders. These include employees, customers, and the communities where they operate.
- 93% of employees believe it’s more important than ever for businesses to lead with purpose.
- 88% of employees believe it’s no longer acceptable for businesses to only make money. They must positively impact society, too.
CSR goes beyond doing good for communities and the environment. It can help you accelerate your financial results, keep employees engaged, and achieve more with your business. Benefits of a strong CSR strategy may include:
- Improved public image and perception
- Increased brand recognition and awareness
- Cost savings
- A smaller environmental footprint
- Reduced waste
- Improved efficiency
- Increased customer loyalty and engagement
- Greater employee engagement and retention
- Better financial performance
What is the role of CSR in your business?
CSR topics have been popular for decades, especially since researcher Archie B. Carroll published his CSR pyramid in 1979. Carroll’s CSR pyramid breaks down CSR into the following areas:
- Economic responsibility
- Ethical responsibility
- Legal responsibility
- Philanthropic responsibility
To hone in on a CSR strategy, CSR researchers suggest business owners ask themselves key questions. Does our fundamental business enhance society? Do any of our products and activities diminish that goal? If so, how can we mitigate or reverse those effects? Answering questions like these will help you find form your CSR focus.
Corporate social responsibility initiatives in action
CSR can involve all parts of your business. Some examples of CSR in action include:
- Ethical sourcing: This involves managing logistics from the origins of a product to its arrival in your warehouse. Your company can work with a third-party organization to assess supply chain ethics. A third party can help ensure your suppliers only engage in fair labor practices.
- Prioritizing organic materials: Your company may use only organic materials to produce goods and products. Organic production has environmental benefits. These include enhanced biodiversity, improved soil quality, and decreased use of fossil fuels. Also, consumers today, particularly younger generations, are increasingly interested in purchasing from organic brands.
- Examining environmental impact: This includes your recycling efforts and use of recycled materials and packaging. It also relates to your use of water, fossil fuels, lumber, and other environmental resources in production.
- Going cruelty-free: This involves eliminating animal testing. Companies may also choose to ban using ingredients derived from animals in products.
- Supporting volunteerism and nonprofits: Some companies have their own nonprofit foundation, organize employee volunteer activities, donate a portion of their profits to a charitable cause, and the like. Others offer volunteering time off (VTO) policies for employees.
Third-party certification organizations can help businesses understand the authenticity and impact of their CSR efforts. They can also help companies identify socially responsible business partners, like suppliers.
As you create and implement CSR strategies, you can look into CSR certifications for your business. These include certifications like the B Corporation certification and admittance into the ISEAL Alliance. Designations like these demonstrate the validity of your CSR efforts to customers and employees.
How to create a strong CSR strategy
To create a successful CSR strategy, first conduct an audit of what your business is already doing. If you’re lacking CSR initiatives, apply an environmental and CSR lens to how your business operations impact your community and the greater world.
If you’re lacking CSR initiatives, apply an environmental and CSR lens to how your business operations impact your community and the greater world.
You might appoint someone to spearhead your CSR efforts. Make your strategy more visible by involving your CEO and leadership team in developing and promoting a plan. Some companies create CSR-focused positions, like a VP of Sustainability, for example. If that’s not available for your business, you could create a committee with members from various departments to include diverse viewpoints.
Also, make it easy for employees to get involved in company CSR efforts. For example, avoid hosting volunteer outings at night or on weekends. Make them part of work hours instead.
Define your values
Clearly define your business values to guide your CSR strategy. Involve your employees as you define your strategy. Give them a sense of ownership to create enthusiasm. Promote your CSR goals, brand mission, and vision in all your business operations.
Watch out for CSR pitfalls
Avoid pitfalls that could cause your CSR efforts to do more harm than good. For example, a business may promote environmental efforts but pay employees unfairly or make false claims on packaging. It’s important to be honest and realistic in the progress you’re making. Avoid exaggerating claims that could derail customer and employee sentiment later on.
Write it down
Put your CSR plan in writing. That way, employees, customers, and business stakeholders can access the strategy and refer back to your efforts. Use specific examples that illustrate your actions and their impact.
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Track and share your progress
Create tracking methods that enable you to measure how your CSR strategy affects metrics like:
- Customer sentiment
- Employee engagement and retention
- Financial performance
- Supply costs
- Environmental scorecard
You can release these findings in an annual corporate sustainability report. Enlist a third-party auditing firm to evaluate your progress.
Highlight non-financial community impact (number of hours volunteered, for example), as well as how CSR efforts are impacting the company’s bottom line. Regular reporting helps your team and stakeholders understand the most meaningful CSR efforts. That way, you can continually evolve your strategy.
Create a CSR program that’s legitimately beneficial
CSR success requires authenticity and purpose. To build or improve a CSR strategy, businesses should create a cohesive approach that involves all business operations. It can be complex to navigate, but a well-planned CSR strategy can produce substantial business results.