Corporate Social Responsibility: Advantages to Your Business
What is CSR?
Corporate social responsibility (CSR) is a company's commitment to values that benefit society in addition to itself and its shareholders. It can include actions that support environmental protection, fair trade, community services, charitable giving and other philanthropic efforts, as well as commitments to equitable business dealings with customers, employees and business partners. It is also often referred to as the triple bottom line (TBL) which measures not only profit, but a company's impact on people and the planet.
While there may be laws addressing some issues such as pollution control and labor protections, corporate social responsibility is self-regulating. Corporations' voluntary commitment to these social issues can cast them in a positive light with their organizations' stakeholders which can include any, many or all of the following (sometimes even more):
- Labor unions
- Allied industries (e.g. T shirt manufacturing is dependent on the cotton industry)
- Educational institutions, especially those with ties to your industry
- Government agencies
- Communities the company serves
- Communities near the company's physical location
- NGOs (non-governmental organizations)
- Associations (i.e., industry specific associations such as the American Medical Association)
- Chambers of commerce
With such an extensive list of stakeholders, there are significant opportunities to demonstrate commitments to a corporation's values.
A Question of "Values"
When purchasing, which is of the following is most important to you? There are no right or wrong answers. Just a question of what most concerns you most of the time.
Advantages of Corporate Social Responsibility
When a business invests in community and philanthropic efforts, one or more stakeholders often receive the benefits of these actions. While that can provide emotional "feel good" returns, a company has to remember that it is in business to create a profit so that it can continue to provide these benefits to society. This is often a difficult balancing act. But the advantages can often outweigh the cost.
Here are just some areas where corporate social responsibility advantages that can be realized:
- Public Relations. Each CSR effort can offer many public relations and media opportunities. Example: If a company makes a donation to a community service project, they would likely send a press release to relevant media outlets. Their story could be picked up and included in publications, broadcasts and online news sites, thereby spreading their company message in several directions for little additional cost. Follow up stories showing how the donation has made an impact can amplify and extend the life of the company's message in the media.
- Human Resources. Corporations that can demonstrate their commitment to the social good can be attractive to top talent who share their set of values. For example, Generation Y (also known as the Millennial Generation) is often identified as a very civic minded population who would be attracted to employers with socially responsible values.
- Sponsorship Marketing Opportunities. Corporate sponsorship of charitable events can keep the company's name and brand in front of target audiences in a more subtle way than traditional sales efforts. If an audience realizes that a company shares their own personal values, they may be more likely to buy from that company. Click here to learn more about brand loyalty.
- Team Building. Particularly when a company's values are shared by employees, charitable efforts can become team building exercises that improve staff morale and job satisfaction.
- Reduced Costs. While CSR projects do have costs, often those costs can be less than traditional marketing channels. As well, the resulting benefits of the efforts can reduce other costs. For example, as discussed above, CSR efforts can attract top talent which can reduce human resource recruitment costs. Green and sustainability initiatives could reduce waste and its associated costs. Projects that generate positive mentions in the media can reduce the need for paid marketing and advertising.
- Expanded Customer Prospect Base. While most buyers buy on "value," there are some groups of customers that buy on "values." This is particularly the case for union organizations and many non-profits. An example would be labor unions who traditionally buy made in the USA and union made goods in support of fellow union members. Another example would be a non-profit for children that buys fair trade merchandise to avoid potential scandals from purchasing goods made with sweatshop or child labor. Green initiatives may also steer buyers into purchasing recycled or biodegradable products. If your company offers a product or service that can legitimately be classified under one of the social responsibility categories, you can attract buyers whose buying specifications demand it. You can thereby effectively position yourself as go-to source when it comes to these buys.
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© 2013 Heidi Thorne