Corporate Social Responsibility

What Is Corporate Social Responsibility ?

What does your company do regarding corporate social responsibility? According to a recent survey, 70% of consumers want to know what the brands they support are doing on social and environmental issues – and 46% are paying close attention to these factors when making purchasing decisions.

In this article, we look at the different types of corporate social responsibility and the benefits they can have for employees, customers, the environment and society as a whole.

What is Corporate Social Responsibility (CSR)?

Corporate Social Responsibility (CSR) is a business model in which companies are socially responsible to their employees, their stakeholders, their customers and the general public.

Companies interested in corporate social responsibility are not just focused on profit. Instead, they think consciously about the impact they have on the environment, their local community and society as a whole.

What are the benefits of corporate social responsibility?

There are many different reasons for companies to embrace corporate social responsibility. A company’s CSR initiatives not only benefit society as a whole, but can also help the company itself:

• Attracting and retaining employees: Employees increasingly want to work for organizations whose values align with their own. The 2022 Deloitte survey of Millennials and Gen Z found that two in five young people have turned down a job because it didn’t align with their values. Those who are satisfied with their employer’s social and environmental commitment are more likely to want to stay with them for longer than five years.
• Driving growth: According to a 2020 study, companies with a “purposeful” positioning experienced 175% growth over a 12-year period, compared to 70% for companies with a low purpose. Commitment to CSR can have a huge impact on a company’s long-term success.
• Improving brand perception: Today, consumers hold the companies they buy from responsible for creating social change and want to support companies that can demonstrate their social and environmental credibility.
• Attract investors: A clear position on corporate social responsibility shows investors that the company is not only thinking about short-term profits, but also about long-term profits. Additionally, investors often use environmental, social and governance (ESG) criteria to evaluate companies in which they want to invest – which is closely linked to CSR.
• Save money: Implementing CSR measures requires an upfront investment that may not provide an immediate financial return. However, you can save money in the long term by, for example, increasing customer loyalty and reducing turnover.

Types of Corporate Social Responsibility

Here are a few different areas you can focus on when creating a CSR plan:

Environmental efforts

Most companies have a large environmental footprint, and taking action to reduce this footprint is an important part of corporate social responsibility. This could mean examining your supply chain to determine which stages, processes, or materials could be made more environmentally friendly, or establishing policies at your headquarters for things like recycling.

Philanthropy

Many companies assume their social responsibility by donating to social causes or non-profit organizations. Larger companies tend to have more resources at their disposal, but small organizations can also make a difference.

In addition to simply donating money, you can also look for ways to “donate” your employees’ services or expertise, such as: B. by paying them for pro bono work where they use their specialized skills.

Ethical work practices

All companies should adhere to ethical working practices, i.e. H. pay their employees fairly and ensure that they receive the benefits they are entitled to.

However, going beyond legal requirements can help you demonstrate your corporate social responsibility. This could include offering your employees additional benefits such as bonuses, employee assistance programs, or company maternity benefits.

For companies working with suppliers in countries where labor laws are less stringent, it is particularly important to ensure that there are sustainable working conditions at every stage of the supply chain – otherwise your reputation could suffer.

Volunteer work

When you volunteer at community events and other charitable causes, you show the public that you care about social issues. Some companies give their employees additional days off so that they can volunteer, others organize volunteer events and encourage all employees to get involved together.

Not only are you doing something good for your community, but you’re also showing that you’re a socially conscious brand when your company helps out without financial compensation.
Building a socially responsible company

Here are the steps you need to take to improve your corporate social responsibility:

1.Evaluate what you are already doing

The first step is to get a full picture of what you’re already doing – you may find that you’ve already introduced some initiatives that fall under the CSR theme.

To assess your current situation, you should review your environmental, social and governance (ESG) practices and policies and work with stakeholders to discuss the impact of your products or services on the community.

2.Define your goals

Next, you should define your CSR goals. These can range from improving the sustainability of your supply chain to making monetary or in-kind donations to local nonprofits. Include these goals in your mission statement and values statement.

3.Decide your priorities

You have a limited amount of time and resources and may not be able to implement all of your planned CSR initiatives at the same time. Work with stakeholders, partners, and employees to identify a manageable number of priority initiatives to begin with.

4.Determine how you will measure success

If you want to know whether your CSR initiatives have been successful, you need to decide when and how you will measure the results of your actions. It’s important to set specific, measurable goals so that you have a clear idea of whether or not you have achieved them.

5.Create an action plan (and review it regularly)

Finally, you should create a plan for implementing your CSR initiatives. This should include a schedule, a list of those responsible for each task, and an overview of the resources allocated to each project. It’s also important to schedule regular follow-ups to monitor progress.

CSR certifications

Certifying your CSR efforts can increase your credibility and help you receive public recognition for your work. Here are a few different CSR certifications you can consider:

B Corp Certification

B-Corporations or B-Corps are companies that have been certified by B Lab and meet high standards for social and environmental performance. To become a B Corp, you must go through a rigorous vetting process every three years. You can start with a free B Impact Assessment to find out how you currently perform.

Compliance with the ISEAL Code

ISEAL Alliance is a global membership organization for sustainability systems and accreditation bodies such as Fairtrade International, Gold Standard, Rainforest Alliance and others. The Alliance conducts assessments to determine whether companies are meeting the organization’s code of conduct. If this is the case, they are considered “ISEAL Code Compliant”.

SASB standards

The Sustainability Accounting Standards Board (SASB) provides a framework for assessing the financial impact of a company’s sustainability efforts. They provide standardized, structured and comparable data that investors and stakeholders can use to compare different companies.

Examples of corporate social responsibility

Below are some examples of corporate social responsibility in practice, from well-known brands:

• Starbucks: The coffee chain has implemented a number of different CSR measures, including sourcing 95% of their coffee sustainably (they are working toward 100%) and introducing hiring programs for veterans and refugees.
• LEGO: LEGO has also launched a number of different CSR initiatives. The company has set a goal to eliminate single-use plastic in its packaging by 2025 and to make all LEGO products from renewable materials by 2030. The company is also committed to local communities in 31 countries worldwide.
• TOMS: TOMS is a footwear brand that has been committed to CSR from the start. Originally, for every pair of shoes sold, the company gave away one pair to a person in need. Today, the company donates a third of its net profits to charity and works to make its products more sustainable.

Corporate Social Responsibility FAQs

Here are the answers to some frequently asked questions about corporate social responsibility:

What is CSR and why is it important?

Corporate social responsibility describes the influence that a company has on its environment. Implementing CSR practices not only benefits society as a whole, but can also have great benefits for companies, such as: B. higher employee retention, better customer retention and more investment capital.

How does corporate social responsibility affect stakeholders?

Employees are likely to stay longer at companies that take CSR seriously. Customers are more loyal to brands whose values align with theirs. And shareholders can see a higher return on investment in companies that strive to have a positive impact on the world.

What is an example of corporate social responsibility?

Some examples of corporate social responsibility include reducing carbon emissions, supporting local communities, and donating. An important part of CSR is also the commitment to ethical working conditions and improving diversity, equality and inclusion in the workplace.