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In an age in which environmental and social issues are top of mind for many consumers, businesses can no longer exist in a bubble. Today's shoppers aren't just looking for the best price and quality — they expect the companies they patronize to do good with their dollars and make a positive impact on the world around them. To this end, many organizations are now making social responsibility a top priority.
Corporate social responsibility (CSR) refers to a business practice that involves participating in initiatives that benefit society. As consumers' awareness about global social issues continues to grow, so does the importance these customers place on CSR when choosing where to shop.
"Technology has brought global connectivity and enabled advocacy and awareness for social situations that were once obscure," said Alexis Magnan-Callaway, whose fashion company Pax Cult donates 10 percent of its profits to an organization of the customer's choice. "Millennials are redefining what it means to connect and give back through this technology. It's not just about having a recycling program or sustainable products. Those actions, while appreciated and commendable, should be done intuitively. People want to feel good about what their dollar is doing in the world." [Social Responsibility Tips for Your Business]
It's not just consumers who are drawn to businesses with a strong CSR strategy. Susan Cooney, founder of crowdfunding philanthropy platform Givelocity, said that today's top talent wants to work for companies who are making a difference.
"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."
Types of corporate social responsibility
CSR can encompass a wide variety of tactics, from giving nonprofit organizations a portion of a company's profits, to giving away a product or service to a worthy recipient for every sale made. Here are just a few of the broad categories of social responsibility businesses are practicing:
Environment: One primary focus of corporate social responsibility is the environment. Businesses, both large and small, 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. Examples include everything from curbing pollution to developing clean energy solutions.
Philanthropy: Businesses also practice social responsibility by donating to national and local charities. Whether it involves giving money or time, businesses have a lot of resources that can benefit charities and local community programs.
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 different labor laws than those in the United States. Research shows that consumers will turn on companies extremely quickly if they are found operating sweatshops or violating other ethical labor practices.
Examples of corporate social responsibility
While many companies now practice some form of social responsibility, a few have made it a core of their operations. Ben and Jerry's ice cream offers one prominent example; the company uses only fair trade ingredients, and developed a dairy farm sustainability program in its home state of Vermont. Starbucks has created its C.A.F.E. Practices guidelines, which are designed to ensure the company sources sustainably grown and processed coffee by evaluating the economic, social and environmental aspects of coffee production. Tom's Shoes, another notable example of a company with CSR at its core, donates one pair of shoes to a child in need for every pair a customer purchases.
Taking socially responsible initiatives with your business is truly a win-win situation. Not only will your company appeal to increasingly 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.
"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."
Additional reporting by Chad Brooks, Business News Daily Contributor.
Originally published on Business News Daily, Jun. 24, 2013. Updated on Feb. 27, 2014.