Advantages of Corporate Social Responsibility: Another Look
In early 2013, I published an article titled "Corporate Social Responsibility: Advantages to Your Business." At the time of this writing, it is still ranking as my top article in terms of web traffic after all these years.
While that article dealt more with defining corporate social responsibility (CSR), this one will offer my observations—and some frustrations!—with the movement as it stands today. If you are considering adding green (or greener) or socially responsible initiatives to your business, the following should help you make some more educated decisions about your investment in them.
My CSR Story
About 2008, the green business movement was gaining steam. Because it aligned with my own goals for living a life as environmentally friendly and socially responsible as possible, I became a green business advocate. Here are some of the things I did:
- Developed two e-commerce websites of promotional products (which was what I was selling at the time) of greener and American-made products.
- Published a blog and a book on eco-friendly promotional products.
- Became known in my local and online networking communities for green business knowledge.
And here’s how that played itself out for me.
What Happened Next
Over time, the suppliers in my promotional products industry moved toward offering more eco-friendly or socially responsible options. It helped me expand these types of offerings to my customers, and it did the same for my promotional industry distributor colleagues. That was a good step for the environment. But when everyone was “going green,” particularly my larger competitors, I lost my marketing advantage.
While I applauded my suppliers who were making strides to offer greener options for us distributors, some of the products were minimally green, meaning that they may have had a little bit of recycled content. Even if products were made with recycled content, some of them were a recycling nightmare on the back end, meaning that they could not be recycled after this second use due to adhesives, construction, or other issues. So they were going to the landfill anyway, just taking longer to get there.
Even though clients were interested in being more green, they were more interested in the other type of green—their cash. So their CSR initiatives were subject to their budgets. My efforts were wasted on them. It also created a values struggle for me personally since I wanted to be greener and socially responsible and wanted my clients to be the same. Should I tell them I won’t do business with them because they’re not like me? And how long and how much effort would it take for me to convince them to institute CSR initiatives, if I was able to do that at all?
Worse was that my regular customers didn’t even bother visiting the CSR-friendly e-commerce sites. I gained some new regular customers online, but not enough to justify my investment in these sites. Compounding the issue was the fact that bigger promotional product industry players were beginning to dominate online. I eventually closed both sites (and the promotional products side of my business, too).
CSR Initiatives Are Becoming a Norm
The good news is that CSR initiatives are becoming more widespread. Customers, shareholders, and stakeholders demand it. The only downside is that means it is no longer an advantage companies can easily leverage for image or public relations (PR) purposes. It’s an expectation.
And is anyone else just plain sick of the “For every purchase, we’ll donate . . . ” or “We support [insert current hot topic movement here]” messaging? Even as someone who’s advocated for adopting CSR initiatives, there comes a point where it’s so overused, it’s cheapened. Another downside of becoming a norm.
Companies Can Be Afraid of Not Having CSR Initiatives
Since I wrote the original article, the #MeToo movement and other social and environmental scandals have rocked the world. The Internet has only gotten stronger since then, too. So companies may be wary of not having CSR programs for fear of backlash in the media and social media.
While this could force companies to be more concerned, it also means that they may be just instituting CSR initiatives to meet regulations or expectations, even if they don’t truly believe in them. Or they will do the bare minimum to stay out of trouble.
Some Talk, But Don't Walk, the CSR Path
Companies may make environmentally friendly or socially responsible claims for the most minimum of efforts. “We support recycling.” Who doesn’t? And that claim may have been for efforts as minimal as having a recycling bin in the office. Companies may also jump on whatever CSR bandwagon is hot right now, but not make a true commitment to it.
It's also tempting for companies to jack up the price of their offerings to cover the CSR investment. I sympathize with that on a business level because I know that everything has a cost. But is that really an investment in CSR? Or are the customers really the pass-through sponsors?
CSR donations may even be for something not needed or wanted by any cause or organization, including the company donating it.
The perfect illustration of this situation would be “The Muffin Tops” episode of the sitcom, Seinfeld. In the episode, Elaine and her former boss open a muffin store that just serves muffin tops because they're so much better than the muffin stumps. They try to “donate”—dump!—the wasted muffin stumps at a homeless shelter. The shelter leader is incensed at their lack of concern for the homeless who might want a whole muffin, and tells them to quit leaving the muffin stumps. It gets even worse when they can’t even properly dispose of the stumps because waste sites won’t take them. CSR fail all around.
Another example is from a job skills teacher I know. Suppliers of all sorts wanted to “donate” (dump) their unused or unwanted inventory on the program. The companies often just wanted to shove the inventory cost off their books and get a tax write off, while being able to say they donate to education. But the real cost came to the school’s program who didn’t need, or couldn’t use, the donation, and who would have to consequently be responsible for storing and disposing of it. The response to these future offers then became one of “no thanks.”
Causes Want Cash
Similarly, companies may say they’ll donate one of their goods or services for every purchase. But does any charity or community actually need these offerings? In my experience, including experience on a nonprofit board, causes want cash.
Here's an article on Behavioral Scientist that really explains the problem with the donation of goods, and how they can even cause more problems for those in need: “Teddies for Timor” and the Perils of Good Intentions. I would sum it up as that we need to do good, not just feel good, in our CSR efforts.
CSR Should Not Ruin UX
I try to purchase as environmentally and socially friendly products as possible. Key phrase here is “as possible.” A lot of my personal purchases qualify. However, some CSR-friendly offerings are just intolerable. In other words, they’re a bad user experience (UX). They may taste horrific, not perform to any acceptable expectation, or may be difficult to acquire or dispose of.
Customers truly committed to the cause may be willing to accept a substandard UX, but most normal customers won’t. Knowing what’s important to customers should help guide CSR initiatives. Also, find a way to make customer compliance with CSR automatic or easy, e.g., easy-to-recycle packaging.
People Don't Care About Causes; They Care About Themselves
Why shouldn’t they? You can’t make people care. All you can do as a company is find and serve those who do care, so that they can influence their own personal networks of family and friends.
Yet I can’t tell you how many times I hear businesses, even on the likes of the entrepreneurial pitch-fest show Shark Tank, who prattle on about how they’re going to change the world because they’re educating people on why they should support this or that cause . . . and, of course, why this will naturally lead to sales. They feel that if they can just logically show people the need to support their CSR effort and business, that people will be convinced. Wrong! Even if people say they’ll support it, that doesn’t mean they will. People only buy what meets their needs. Businesses are built on sales, not sentiments.
And kicking it up a notch by shaming and frightening potential donors and supporters never works. I learned this when I was on a nonprofit board for an animal shelter foundation for many years, and also while a member for an association seeking legislation changes. Show them how you’ll follow a path to a positive outcome, how they can join you on the journey, and why it matters to them (not the cause).
Difficulty in Measuring CSR and Altruism
As a business, particularly a small business or entrepreneurial startup, how much can you really do to create significant world change through your own CSR initiatives? Probably not much, unless you’re a large organization with deep pockets and other resources. That’s not to say you shouldn’t try. Every little bit and baby step helps to create a better world. But understand the limitations of what you as an individual or individual company can do.
I would venture to guess than many companies don’t even think about this aspect. Why? Because it’s difficult and expensive to measure. Others may not measure because they don’t want to know they can’t achieve much.
Say you launch an effort to reduce greenhouse gases. How would you ever expect to measure your contribution to the cause in both terms of what’s measured and what would be considered significant progress? And can you legitimately say your contribution was a factor in any change? All you can really do is tell customers and the public what you’ve invested in achieving some altruistic goal, or limit your reporting to some result you can measure (e.g., “We’ve collected over $10K in donations for such-and-such charity.”).
So Should You Invest in CSR Initiatives?
After reading the foregoing, you might think that I’m anti-CSR. I’m not. However, I encourage those considering it to carefully evaluate, by the numbers, what investment will be required, and what realistically can be achieved.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2019 Heidi Thorne