Although you could argue that Corporate Social Responsibility (CSR) means many things to many people, there is no doubt that they were originally conceived as a way for businesses to have a positive impact on their employees, stakeholders, communities and the world.
While some notable businesses took their CSR goals to heart, sadly others only used it as a PR and reputation building opportunity, with very little action. When push came to shove they would always prioritise their bottom line over what was socially responsible.
So what is CSR?
Usually described as a company's commitment to carrying out their business in an ethical way, CSR ensures business processes are managed while taking account any social, economic and environmental impact and considering human rights.
Done correctly CSR can help improve performance, increase competitive advantage and build trust with customers and employees through positive brand image. It can also help achieve operational cost savings, by avoiding costs of wasted energy or unnecessary fees.
However, there is a danger when there is a lack of authenticity, as today customers and employees are speaking with their values as well as their wallets and will demand that they can trust what a business says is truth. Yes, they want the latest gadget and fashion, delivered quickly with first class customer service, but they want it with a clear conscience - consumers today care about what matters.
The benefits of CSR are well documented and include:
Greater ability to attract and retain talent - a business who prioritises CSR can find it leads to improved staff recruitment and retention. Businesses can use their values and principles as inspiration to attract the best talent and employees may be motivated to stay longer, thus reducing the costs and disruption of recruitment and retraining.
Positive business reputation - building a reputation as a responsible business can lead to competitive advantage and can attract positive media attention.
Increased sales and customer loyalty - businesses and consumers often favour suppliers who have responsible policies and a sustainable brand. Some customers don't just prefer to deal with responsible companies - they demand it.
Operational costs savings - by reducing resource use, waste and emissions, you can help the environment and save money too. With a few simple steps, you may be able to lower your utility bills and achieve savings for your business.
Easier access to capital - investors are more likely to back a reputable business with strong CSR policies.
It sounds easy but where do you start?
It sounds perfect, but what if you’re not a multinational with spare cash to invest in great CSR initiatives? Isn’t it too time consuming and too expensive? And where do you actually start?
Well the good news is that it doesn’t take huge invest or lots of time to make a real difference, policies can focus on:
Environmental management - focus on waste reduction and sustainability.
Responsible sourcing - choose your suppliers carefully, looking at their labour, health, safety and environmental practices.
Improvement of working standards and conditions - responsible business practices will often aim to do more than simply comply with the law.
Development of employee and community relations - sponsoring local events, taking part in charity initiatives, volunteering, contributing to educational and social programmes all benefit.
Consumers - fair and open business practices and good customer relations build brand loyalty.
Transparency - be clear in your actions and your words.
Monitoring - if something isn’t working be honest and make changes. Engage with employees, customers and stakeholders to see how you’re doing and most importantly, action any feedback.
Above all, it’s very clear that CSR is important to people and by taking it seriously and engaging in it, it can be good for your business and bad for those that don't.