What is corporate social responsibility and why is it vital for your business?
91% of global consumers expect companies to operate responsibility, meaning there’s an ever-growing demand for businesses to focus on their corporate social responsibility (CSR) to stay ahead of their competition.
But what does this really mean for businesses?
What is corporate social responsibility?
Corporate social responsibility is the commitment to the environment, people, procurement and the community from a business’ activities. This ensures for an ethical and sustainable business model.
Being such a broad concept, CSR can drastically vary depending on a business’ industry. However, the values remain the same, positively impacting those the business touches and influencing better standards of business behaviours by all stakeholders.
It can be as simple as reducing paper waste and switching lights off at the end of the day, to donating to nonprofit organisations.
The importance of corporate social responsibility for your business
CSR is not regulated in the UK, so companies are not legally enforced to follow any policies. But with expectations from consumers for CSR at its highest ever, implementing and refining actions that illustrate CSR practices is becoming progressively important, even for business growth.
CSR initiatives can help with a business’ competitive advantage; it can earn better brand recognition and trust with consumers and shareholders alike. It’s a long-lasting business model, meaning that in turn it can improve financial performance.
Not only do CSR practices provide external advantages, they can be beneficial internally also.
75% of millennials would take a pay cut to work for an ethical employer, meaning a responsible company could attract and retain better talent. Employers who actively behave ethically and sustainably are more likely to have a highly engaged workforce, and moral behaviours are more likely to be seeded down to employees.
How can you implement a CSR programme?
Being perceived as an authentic business is an integral practice for businesses in the modern day and introducing CSR actions is a credible approach to gaining an edge over your market.
A CSR strategy doesn’t have to be an immense investment. Starting with small activities that are aligned to your business goals, size and market, can help you to build up a sustainable strategy that can benefit your business in the long-term.
Some common business CSR ideas that have positive social, economic and environmental impacts include:
- Partnering with local community groups
- Improving employee diversity
- Reducing wastage sent to landfills
- Offer staff with volunteering opportunities
- Charitable donations (monetary, products or services)
- Implementing recycling schemes
- Cycle to work incentives
- Sourcing ethical suppliers
- Offering Fairtrade food options
Regardless of the actions you enforce, your business needs measurable factors to assess its performance.
KPIs for CSR are largely dependent on your approach. They can include customer satisfaction, electricity usage, members of staff in community outreach initiatives, ratio of female employees in managerial positions and corporate donations.
It’s essential to communicate your CSR activities to your consumers and employees, as 52% of consumers will assume a company isn’t operating responsibly unless they see evidence illustrating their efforts.
Examples of corporate social responsibility
Some of the world’s largest companies have established impressive CSR strategies. Here are 5 excellent examples of corporate social responsibility:
- Ernst and Young – Their CSR strategy is dedicated to providing support to schools, mentoring young people to maximise their career opportunities.
- TOMS Shoes – Their globally recognised ‘One for One campaign’ donates a pair of shoes for children in need for every pair of shoes that is sold. This has accumulated to over 60 million shoes given since 2006.
- Lego – With a focus on their carbon footprint, by 2020, Lego plan to source 100% renewable energy and aim to switch completely to sustainable packaging.
- Morrisons – They’ve become the first UK supermarket to remove plastic packaging from fresh fruit and vegetables and forecast a boost in sales of up to 40%.
- Disney – Their launch of several diversity campaigns, including for Women’s diversity and ethnic diversity opportunities, gained them a spot in the DiversityInc Top 50 list.