Today's consumers hold companies to a higher standard. They're looking for more than just material products or quality services when choosing a company to work with: Nine in 10 consumers expect companies to not only make a profit, but also operate responsibly to address social and environmental issues, according to a study by Cone Communications. Eighty-four percent of global consumers also said they seek out responsible products whenever possible.
Recognizing how important social responsibility is to their customers, many companies now focus on and practice a few broad categories of corporate social responsibility (CSR).
1. Environmental efforts: One primary focus of corporate social responsibility is the environment. Businesses regardless of size have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society as a whole.
"European companies have really led the way on environment efforts, such as green energy usage, eco-friendly office and travel policies, and ensuring that businesses take a responsibility for controlling if their net impact is positive or negative," said Richard Stevenson, head of corporate communications at ecommerce platform ePages.com.
2. Philanthropy: Businesses also practice social responsibility by donating to national and local charities. Businesses have a lot of resources that can benefit charities and local community programs.
3. Ethical labor practices: By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.
4. Volunteering: Attending volunteer events says a lot about a company's sincerity. By doing good deeds without expecting anything in return, companies are able to express their concern for specific issues and support for certain organizations.
"Ethical labor and volunteering are no-brainers – consumers and partners want to hear that a business is building something more than just revenues. Even modest steps such as 'open door days' can be a great way to build links to your community and reflect that you aim to make valuable, long term impact," Stevenson added.
With millennials now holding buying power majority, the face of consumerism has changed completely, according to DeeAnn Sims, founder of creative agency, SPBX.
"This new wave of buyers is demanding transparency, and when given the choice, will almost always choose a brand or product tied to a socially conscious cause rather than a corporate big name brand," Sims said.
Sims also said that this places CSR at the forefront of modern day business practices.
Why CSR matters
All stakeholders in a business seek to understand and value the mission of the company, and why they should invest and support in it and that, according to Stevenson, is why CSR matters.
"In recent history, the organizations that have achieved remarkable things tend to be the ones that share success with others, instinctively," he said.
Liz Maw, CEO of nonprofit organization Net Impact, noted that CSR is becoming more mainstream as forward-thinking companied embed sustainability into the core of their business operations to create shared value for business and society.
"Sustainability isn't just important for people and the planet, but also is vital for business success," said Maw, whose company connects students and professionals who want to use their business skills to do social good. "Communities are grappling with problems that are global in scope and structurally multifaceted – Ebola, persistent poverty, climate change. The business case for engaging in corporate social responsibility is clear and unmistakable."
"More practically, [CSR] often represents the policies, practices and initiatives a company commits to in order to govern themselves with honesty and transparency and have a positive impact on social and environmental wellbeing," added Susan Hunt Stevens, founder and CEO of employee engagement platform WeSpire.
Consumers aren't the only ones who are drawn to businesses that give back. Susan Cooney, head of marketing & partnerships, diversity inclusion at Change Catalyst, said that a company's CSR strategy is a big factor in where today's top talent chooses to work.
"The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue," Cooney told Business News Daily. "Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back."
Examples of corporate social responsibility
While many companies now practice some form of social responsibility, some are making it a core of their operations. Ben and Jerry's, for instance, uses only fair trade ingredients and had developed a sustainability program for dairy farms in its home state of Vermont. Starbucks has created its C.A.F.E. Practice guidelines, which are designed to ensure the company sources sustainably grown and process coffee by evaluating the economic, social and environmental aspects of coffee production.
However, Stevens said that companies need to understand what their core social purpose is a how that aligns with their stated mission, to create a cohesive CSR strategy.
Practicing what you preach
Undertaking socially responsible initiatives is truly a win-win situation. Not only will your company appeal to socially conscious consumers and employees, but you'll also make a real difference in the world. Keep in mind that in CSR, transparency and honesty about what you're doing are paramount to earning the public's trust, Cooney said.
"If decisions [about social responsibility] are made behind closed doors, people will wonder if there are strings attached, and if the donations are really going where they say," Cooney said. "Engage your employees [and consumers] in giving back. Let them feel like they have a voice."
Stevens reminded business owners that the corporate world has more power than many realize, and using that power to improve the world can bring people of all backgrounds, ages and interests together.
"Given their power and sheer size, corporations can solve big social problems and have a huge impact," she said.
Additional reporting by Sammi Caramela and Nicole Fallon Taylor. Some source interviews were conducted for a previous version of this article.