Corporate social responsibility (often referred to as the shortened ‘CSR’) is a practice followed by many companies where they work to improve society in some form. CSR is often seen in terms of philanthropy, environmental leadership, ethical labor practices, and economic responsibility. Show
If you’re wondering how CSR impacts businesses—particularly the businesses that enact these practices in the first place—the advantages are expansive. In this complete CSR guide for businesses, we’ll dive deep into the benefits of corporate social responsibility—everything your company needs to know on the topic to maximize the effectiveness of your efforts—exploring the following topics:
Ready to get up to speed on socially responsible efforts and see what you can do to bring your business to the next level?
Let’s begin! FAQ: How CSR Impacts BusinessesDoes your company have an existing CSR plan in place, or are you looking to dive into strategic corporate social responsibility for the first time? Either way, you’ll likely have some questions regarding the practice. Let’s walk through five questions and answers that are often pondered by corporations such as yours! What are the main components of corporate social responsibility?Corporate social responsibility is an overarching term used to describe a wide range of corporate efforts that are designed to make the world a better place. Most CSR initiatives will encompass these key values:
Some CSR efforts may incorporate elements from multiple categories, too! For example, a company financially contributing to an environmentally-focused nonprofit (whether through grants, matching gifts, etc.) can fall under both environmental and economic responsibilities. How can a company become more socially responsible?There are tons of practices that businesses of all shapes, sizes, and sectors are adopting in order to increase their level of corporate social responsibility. Here are a few things a company might do:
The tactics you choose to employ at your business can also play a role in the benefits you see overall. For example, prioritizing staff wages and employee benefits can have a significant effect on the company’s internal culture and team member engagement. While this will likely also result in improved consumer relations (i.e., buyers like to shop with businesses they know treat employees well), the impact seen might be lesser as compared to that of the employees. And the same is true the other way around! Producing ethical goods with sustainable practices can bring positive results to both consumers and employees, though consumer relations may see a larger, more tangible impact in terms of sales. What is ESG and how does it compare to CSR?There are a lot of acronyms in the corporate world, as you surely know. As a refresher, CSR refers to corporate social responsibility. Now, here’s another one you might hear, especially in conversations about social responsibility: ESG. ESG stands for environmental, social, and governance, and is a measure of the extent to which a business makes a positive impact on society beyond its own shareholders. While the two ideas go hand in hand, they’re not entirely synonymous. One of the largest differentiators between the concepts is that CSR is a business model used to hold a company accountable for its actions to society, while ESG is a quantifiable measurement of a company’s social impact outcome. How can I get my employees to participate in CSR?Positive employee relations can be a top motivator of corporate social responsibility efforts in companies. But did you know that the employees themselves can actually participate (and benefit) as well? These employee-driven programs can even see increasingly positive internal results! For example, employees who participate in a company’s matching gifts or volunteer grant programs benefit from knowing their own nonprofit donations or volunteer hours are making even more significant impacts on charitable causes that they care about. Plus, they know their employers are making an effort to support their favorite charities as well. So how can you drive participation in these programs once they’re up and running? Here are a few ideas:
Workplace giving efforts, in particular, enable businesses to empower employees with hands-on roles in the company’s CSR. When employees feel they have a direct say in their employers’ social impact efforts, they’ll be increasingly aware of the efforts in place, and more likely to be highly engaged with the business. What are new CSR trends that businesses are adopting?As the world is changing, innovative technologies are developed, and new social, environmental, and economic needs arise, the CSR movement will continue to evolve. Here are a few things you can expect to see in the near future! Many companies are transitioning to more employee-driven CSR programs—especially when it comes to philanthropy. In fact, our research reports that over 39% of companies aim to expand their workplace giving initiatives in the next two years! Additionally, more and more companies are wanting to take a stand on social issues and other current events in the past few years. Though these issues may sometimes be controversial, a 2020 research study reported that nearly 60% of consumers expect the brands they support to have a position on topics such as racial discrimination, social justice, climate change, income inequality, and more. 50% of survey respondents even reported conducting online research to see how a business reacts to social issues before making a buying decision! Not to mention, Diversity, Equity, and Inclusion (or DEI) continues to see significant growth at the forefront of many businesses’ practices. As a result, companies are placing a higher emphasis on developing an inclusive and diverse workplace that’s welcoming to people of all races, genders, religions, sexual orientations, ethnicities, socioeconomic statuses, disabilities, and more. Key CSR Statistics Businesses Should KnowThere are tons of reasons why a business might participate in corporate social responsibility—many of which boil down to the effects seen by the company’s employees and consumers alike. Here are some key facts and figures that help communicate the implications of CSR: How CSR Impacts Businesses’ Employees(Sources: Double the Donation and re: Charity)
How CSR Impacts Businesses’ Consumers(Sources: Harvard Business School and ViewsForChange)
4 Top Benefits of CSR for BusinessesBeyond the ideas of basic altruism, corporate social responsibility tactics also provide participating companies with powerful business benefits. Consumers, employees, and other essential shareholders will be more inclined to support your efforts, and you’ll see impactful results such as these! 1. Unique marketing opportunitiesCause marketing (or cause-related marketing) is a form of CSR in which a business supports a charitable cause while receiving strategic marketing benefits from the relationship. These types of CSR campaigns often involve a company offering to give a certain amount of money to a nonprofit organization in response to increased sales results (for example, 10% of a company’s profits may be donated to charity or a business may donate $1,000 for every 100 products sold). When done well, cause marketing enables consumers to feel good about their purchases to socially responsible companies. As a result, the consumers are willing to pay a higher price, switch brand loyalties, or increase quantities of their purchases due to it benefiting a good cause. So for your business, not only will you have the opportunity to participate in charitable efforts, but you’ll also gain more customers and more dollars toward your bottom line. 2. Increased employee engagementThe fact is, people want to work for companies that they feel good about contributing to. When an individual knows that their efforts at a business help drive social good, they’ll be driven to produce elevated results in their roles. And for that reason, there’s a significant positive correlation between employee engagement and corporate giving. Pride in the company, along with belief in senior leadership, are some of the most essential drivers of employee engagement levels—and luckily, both components see benefits from social responsibility as well. When employees are particularly engaged, the company will also see high levels of productivity, increased retention rates, and more. 3. New talent attracted to your teamJust like effective CSR efforts drive existing employees to want to do more in their roles at your company, the same efforts can also be used to attract new employees to the team. As a result, many HR representatives are prioritizing corporate social responsibility in their recruiting efforts and within conversations with prospective candidates. Individuals looking to join a company that participates in CSR will be drawn to your business, and you’ll have a competitive advantage against other potential employers. 4. Improved internal company cultureCompanies partaking in CSR also tend to have more positive internal cultures, which, of course, helps drive increased levels of engagement and retention. Company culture is more of an abstract concept and often incorporates the attitudes and behaviors of the business, its leadership, and its employees altogether. Let’s take a look at a few examples to see how this works. Here are three types of CSR initiatives that can bring about a positive business culture:
Utilizing philanthropic initiatives as a way to build a positive company culture is a common practice for many businesses. But remember, the most successful efforts involve hands-on involvement by leadership as well. When employees see
their management and company leaders participating, they’ll be more inclined to do so themselves. And when individual team members get involved, the company’s culture is more likely to benefit. 5 Examples of Businesses Doing CSR RightLooking to get started with CSR efforts but not sure how to begin? Get inspired by these popular companies who have exemplified what it looks like to be socially responsible and philanthropic (while also remaining profitable!). Gilead SciencesWhen it comes to philanthropic corporations, Gilead Sciences has led the pack for several years in a row. This biotechnology company contributes an average of $400 million each year to nonprofit causes, which comes out to a total of nearly 3% of their pre-tax profits. Plus, they offer a matching gift program for current full-time employees, agreeing to match donations of up to $2,000 per year to most nonprofit organizations! They’ve also published a number of lofty goals to further elevate their CSR by 2030—including achieving net zero operational greenhouse gas emissions, ensuring 100% of their packaging is recyclable, eliminating all unnecessary plastics, and significantly increasing Black, Hispanic, and female representation in the company. Johnson & JohnsonJohnson & Johnson has prioritized reducing their company’s impact on the planet over the last three decades by highlighting the importance of sustainable business practices. One key pillar of this effort was accomplished by harnessing wind power to significantly reduce pollution from their operations and ultimately offering up a renewable (and economic) alternative to traditional electricity. In addition to the company’s environmental efforts, Johnson & Johnson also donates generously to many nonprofit organizations, including schools, health and human services, civic and community organizations, and more. Much of this funding is contributed through workplace giving programs as well, matching team member donations at a 2:1 rate up to $20,000 per employee per year! Google is another example of a highly regarded business with multiple effective CSR efforts in place. As a result, the company has earned the Reputation Institute’s highest CSR score, due in part to its philanthropic initiatives, renewable energy projects, and environmental impact reduction. Not only do their data centers use 50% less energy than other comparable institutions, but they’ve also committed more than $1 billion to develop environmental efforts in the future. Plus, they have a generous donation-matching program, offering up to a $10,000 gift match for full- and part-time employees. LyftOne example of a business hosting a successful cause marketing campaign as a component of an overall CSR strategy is Lyft. Through their recent partnership with organizations like Bread of Life, United Way, and the National Council on Aging, Lyft offered free rides to essential workers and vulnerable populations through an initiative called LyftUp during the COVID-19 pandemic. With this model in place, Lyft has elevated its brand reputation as one that cares about the underserved in its communities, thus driving popularity and sales. Ben & Jerry’sSince 1988, Ben & Jerry’s has been known for being a particularly outspoken advocate for all sorts of social causes. The company has partnered with nonprofit organizations such as 1% for Peace, Farm Aid, Children’s Defense Fund, Rock the Vote, Alaska Wilderness League, MyClimate and NativeEnergy, and many more to provide aid for social, environmental, economic, and scientific causes. They’ve also launched more than one ice cream flavor dedicated to their favorite social causes, which include their “Save Our Swirled,” “Empower Mint,” “Justice ReMix’d,” and “Peace Pop.” Corporate social responsibility is often framed as a win-win-win situation because companies, nonprofits, and the greater community each benefit greatly from its existence. As you consider how CSR impacts businesses like yours, think about all the good you can do in the world as well! Ready to learn more about the benefits of corporate social responsibility and philanthropy to businesses like yours? Check out these other guides:
How does social responsibility apply to customers?Social responsibility in marketing involves focusing efforts on attracting consumers who want to make a positive difference with their purchases. Many companies have adopted socially responsible elements in their marketing strategies to help a community via beneficial services and products.
What are the main benefits of social responsibility?The potential benefits of CSR to companies include:. better brand recognition.. positive business reputation.. increased sales and customer loyalty.. operational costs savings.. better financial performance.. greater ability to attract talent and retain staff.. organisational growth.. easier access to capital.. Why do you think it is important for companies to practice corporate social responsibility?CSR demonstrates that you're a business that takes an interest in wider social issues, rather than just those that impact your profit margins, which will attract customers who share the same values. Therefore, it makes good business sense to operate sustainably.
How does society benefit from the social responsibilities done by big corporations?The companies benefit through lower operating costs, increased sales and customer loyalty, greater productivity, gaining the ability to attract and keep skilled employees, getting access to more capital through more willing investors, etc. CSR is a thoughtful and practical way to give back to society.
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