Corporate Social Responsibility: What it is, Why it Matters, & How it Impacts Business in 2016
Corporate social responsibility (CSR) refers to business initiatives that benefit society. These initiatives fall into three categories, often called the triple bottom line, which are social, environment, and economic. At first, many businesses didn’t take corporate social responsibility seriously or at least pretended to when it came to the environment in what’s known now as greenwashing. However, as consumers have become more aware and educated on social issues like global warming and unethical labor practices, they have begun demanding businesses institute policies that benefit all of society rather than just the business’ bottom line.
So, what happens if companies don’t practice corporate social responsibility? Simply put, consumers will take their money and business to a company that does. Now that you know the basics, let’s delve deeper into why CSR matters, how it impacts business today, and a few examples of businesses that have implemented CSR successfully.
Why Corporate Social Responsibility Matters & How it Impacts Business:
While it was widely held in previous decades that companies should only focus on their bottom lines, the past decade has seen a change in this thinking. In fact, 66 percent of online consumers said they would pay more for products or services from companies that are socially and environmentally responsible, according to a 2015 Nielsen survey. That same survey also found that consumer-goods’ brands with a commitment to sustainability outperform those that don’t.
Besides the potential loss of socially conscious consumers, CSR impacts a business’ ability to attract top talent and affects employees’ job satisfaction levels and retention rates. The next generation of workers currently entering the workforce seek out employers with a clear and effective CSR strategy. Quality talent in 2016 wants to be employed by a transparent company with the goal of doing good, while also making a profit. Businesses that don’t prioritize a corporate social responsibility strategy risk losing top talent to companies that are doing so.
Additionally, businesses that practice CSR have happier and more satisfied employees. This is because employees feel working for a socially conscious employer gives them a sense of purpose. Also, businesses practicing corporate social responsibility tend to invest more in their employees and work harder to create a workplace that employees enjoy returning to each day. Given that the current average in the U.S. for employee tenure is 4.2 years, implementing an expansive and effective CSR strategy can help employers retain their current employees for longer.
The rise of social media has also impacted the importance of corporate social responsibility. Today, companies with unethical business practices are exposed harshly on social media and can have their reputation damaged greatly in a matter of a few hours. Alternatively, social media also works as a tool to highlight companies implementing CSR or those with ethical business practices, which can lead to increased sales, a larger audience reach, and free positive publicity.
3 Examples of Successful Corporate Social Responsibility Strategies:
Here’s a look at a few major companies that have successfully implemented CSR strategies.
– Ben & Jerry’s: This Vermont-based brand is well-known for its corporate social responsibility. In fact, it’s a cornerstone of how this company operates. In addition to speaking out and creating various flavors around social issues, the company has a history of proven social responsibility dating back to 1985 when they established the Ben & Jerry’s Foundation. The brand uses only fair trade ingredients and also developed a sustainability program for dairy farms in Vermont. This is a great example of a business that is prioritizing environmental and social issues, while also donating to various additional charities, organizations, and movements.
– Target: Many critics of CSR claim a major corporation cannot afford to prioritize social or environmental justice while still being profitable, but Target clearly proves this wrong. The massive company has worked since 1946 to provide local and environmental support to the communities their stores are located in. Along with implementing sustainable business practices, Target also organizes and donates to various charity campaigns and initiatives. Since 2010, the company has donated more than $875 million to the area of education alone. Target also made headlines this year for social justice when they came out with their pro-transgender bathroom policy, which was and still is a divisive issue across the U.S. Showing consumers they are not afraid to take a stand for what’s right.
– Google: Despite being one of the largest corporations in the world, Google is an excellent example of a business that is constantly working for the betterment of society. In addition to various other CSR initiatives, the company has implemented a widely successful environmental policy called Google Green, which is a corporate effort to use resources more efficiently and support renewable energy sources. It has led to an overall reduction in power requirements for their data centers by 50 percent.
Consumers want to do business with a company they can trust. Due to this, it’s now commonplace for a business to have a sustainability report and various CSR initiatives in place. In order to remain competitive in today’s marketplace, which is only growing more interwoven with social and environmental issues, businesses must practice corporate social responsibility. Those that don’t will be unable to attract or retain top talent, continue to experience decreased sales, and risk going viral for all the wrong reasons on social media leading to a damaged reputation.
If your business has an effective corporate social responsibility strategy in place, but are unsure how to best market it to consumers in order to generate more sales, contact Mondo today. We’ll match you with the digital marketing and social media marketing talent you’re missing.