In today's socially conscious environment, employees and customers place a premium on working for and spending their money with businesses that prioritize corporate social responsibility (CSR).
CSR is an evolving business practice that incorporates sustainable development into a company's business model. It has a positive impact on social, economic and environmental factors.
Katie Schmidt, the founder and lead designer of Passion Lilie, said CSR can positively impact your business by improving your company image, building your brand and motivating you as a business owner.
"What the public thinks of your company is critical to its success," Schmidt told Business News Daily. "By building a positive image that you believe in, you can make a name for your company as being socially conscious."
As the use of corporate responsibility expands, it is becoming extremely important to have a socially conscious image. Consumers, employees and stakeholders are beginning to prioritize CSR when choosing a brand or company. They are holding corporations accountable for effecting social change with their business beliefs, practices and profits.
"A robust CSR program is an opportunity for companies to demonstrate their good corporate citizenship … and protect the company from outsized risk by looking at the whole social and environmental sphere that surrounds the company," said Jen Boynton, CEO of B Targeted Marketing Co.
To illustrate how critical social responsibility has become, previous research by Cone Communications found that more than 60% of Americans hope businesses will drive social and environmental change in the absence of government regulation. Nearly 90% of the consumers surveyed said they would purchase a product because a company supported an issue they care about. More importantly, roughly 75% will refuse to buy from a company if they learn it supports an issue contrary to their own beliefs.
Consumers aren't the only ones who are drawn to businesses that give back. Susan Cooney, head of global diversity, equity and inclusion at Symantec, said that a company's sustainability 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," said Cooney. "Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back."
In addition to a better company image, Schmidt said sustainable development can help your business financially. For example, using less packaging and less energy can reduce production costs.
4 corporate responsibility types your business can practice
Recognizing how important socially responsible efforts are to their customers, employees and stakeholders, many companies now focus on a few broad CSR categories:
- Environmental efforts: One primary focus of corporate social responsibility is the environment. Businesses, regardless of size, have large carbon footprints. Any steps they can take to reduce those footprints are considered good for both the company and society.
- Philanthropy: Businesses can practice social responsibility by donating money, products or services to social causes and nonprofits. Larger companies tend to have a lot of resources that can benefit charities and local community programs. It is best to consult with these organizations about their specific needs before donating.
- Ethical labor practices: By treating employees fairly and ethically, companies can demonstrate their social responsibility. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.
- Volunteering: Attending volunteer events says a lot about a company's sincerity. By doing good deeds without expecting anything in return, companies can express their concern for specific issues and commitment to certain organizations.
Building a socially responsible business
Although being socially responsible isn't free – it can cost time, money and resources – it is important to remember that every little bit can help the environment. Schmidt said you can start making an impact on society by donating a small portion of your sales to a cause you care about.
"Even 5%, though it might not sound like a lot, can add up to make a difference," said Schmidt. "When thinking of ways to donate and give back, start local and then move from there."
When initiating CSR, give your employees a voice by involving them in the decision-making process. Create an internal team to spearhead the efforts and choose an organization or cause they care about. Contributing to something your employees are passionate about can increase engagement and success. Involving your employees in the decision-making process can also bring some clarity and assurance to your team.
"If decisions [about CSR] 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."
Regardless of which strategies you use for sustainable development, Boynton said it is important to be vocal. Let your consumers know what you are doing to be socially conscious.
"Consumers deserve to share in the good feelings associated with doing the right thing, and many surveys have found that consumers are inclined to purchase a sustainable product over a conventional alternative," she said. "Announcing these benefits is a win-win from both a commercial and sustainability perspective."
What to avoid when creating a socially responsible business model
Becoming a socially responsible business can be simple, but there are a few things to avoid in the process. Businesses should avoid participating in charitable efforts that are not related to their core business focus or ethical standards in any way. Instead of blindly sending money to a completely unrelated organization, find a nonprofit that your company believes in or a project in your community.
Avoid using CSR opportunities solely for marketing purposes. Schmidt said running a corporate responsibility campaign as a quick marketing scheme can backfire when your business doesn't follow through. Instead of employing a one-time act, you can adopt socially responsible business practices over time. Schmidt said employees and consumers tend to react positively to companies that embrace long-term social responsibility.
If you are considering sustainable activities that aren't legally required yet, don't wait. By adopting socially responsible norms early on, you can set the bar for your industry and refine your process. Undertaking CSR initiatives is truly a win for everyone involved. The environmental impact of your actions will not only appeal to socially conscious consumers and employees but can also make a real difference in the world.
Additional reporting by Nicole Fallon and Sammi Caramela. Some source interviews were conducted for a previous version of this article.