CSR stands for Corporate Social Responsibility. It’s a term that’s now used commonly enough that most people in the field of business have probably heard it before. And even if this is your first time hearing it, the name itself is quite self-explanatory. Corporate Social Responsibility is the responsibilities that corporations have towards society, and activities that are done in an effort to satisfy them.
So it seems simple, but there are many different layers/ angles to CSR. For example, company A might rally their employees to participate in a charity marathon. Company B on the other hand, might train their management staff not to sexually harass people in the workplace. They may seem like two different things, but both can be considered as CSR initiatives. Let’s take a look at three broad categories of CSR and learn the different aspects of it.
1. Environmental CSR
This is when you make conscious business decisions to ensure your company isn’t negatively damaging the environment. A good example of this is single-use plastics. The damage they do to our environment has been widely reported in recent years, leading to more and more businesses to try and eliminate single-use plastics in their products and services. Starbucks made headlines when they made an inspiring pledge to eliminate plastic straws in all of their 28,000+ stores by 2020.
Other examples of Environmental CSR include things like reducing carbon emissions by switching to clean energy, going paperless to reduce waste, sourcing non-toxic materials, and finding ways to recycle industrial waste.
2. Ethical CSR
Sometimes also referred to as Human Rights CSR, Ethical CSR is working to achieve ethical business practices. For example, making sure your employees’ rights are protected by giving them proper paid leave, reducing the amount of overtime work and compensating them fairly when it does happen, and creating an equal and safe work environment for racial and sexual minorities are all examples of good Ethical CSR practices. There’s also an aspect of being ethical outside your company. The Body Shop has committed to stamp out modern slavery in their entire supply chain, paying special attention to local farmers and workers who are the source of their ingredients. It’s also important to think about how ethical the companies you outsource your work to are. In 2013, the Rana Plaza factory in Bangladesh collapsed, killing 1,134 garment workers. Major clothing brands were heavily criticized for their lack of due diligence in ensuring their clothes were ethically made. When serious accidents happen, when human lives are being sacrificed for profit, “I didn’t know, it was my supplier’s fault” isn’t a good enough excuse.
3. Philanthropic CSR
Philanthropic CSR is something the company does outside of their business model, to help people or causes that need support. Some people think of philanthropy and CSR as two separate things, but we think giving and sharing resources with those in need is also a great way for corporations to contribute to society.
One of the simplest ways to do this is donating money to NPOs and other charitable organizations. In 2018, it’s estimated that corporations in America donated a total of $20.05 billion.
Why is CSR important?
Now that we know what CSR is, it’s time for the big question—why should my company care? It goes without saying that CSR is important from a moral standpoint, but for businesses, every action needs to take cost and returns into consideration. You may be morally compelled to donate all of your revenue and your employee’s time, but you don’t want to threaten the health of your company. To make the best impact, you need to help people while thriving as a company. Let’s take a look at why CSR is important for your company.
1. Your Customers Care
The 2017 Cone Communications CSR Study report has found that 79% of American consumers try to find products that are socially and environmentally responsible. Consumers are also conscious of what companies do outside of their business too. 87% of consumers said they would buy products from companies that advocated for an issue they cared about, while 76% said they would boycott a company that is not in line with their values and beliefs. Such tendencies are higher among millennials, and as this generation starts to earn and spend more money (it’s estimated that Millennials will spend $1.4 trillion in 2020, making up 30% of total retail sales), they’re definitely a group you want to impress.
2. Creation of Strong Brand Story
Sharing stories about your CSR initiatives is a great way to tell your brand story in a genuine way. Always, a menstrual hygiene products brand, generated a lot of attention in 2015 with their #LikeAGirl campaign that was launched with an impactful video. It highlighted social stereotypes that can be devastating for adolescent girls and encouraged people to change the insulting connotation of the phrase “like a girl” into a positive one. This wasn’t just a one-time, spur-of-the-moment marketing scheme. What really made this campaign work is the fact that Always has been helping girls and women all over the world for over 35 years, through initiatives such as donating female hygiene products to women in need and working with organizations like UNESCO and Save the Children to empower young girls and women through education. Finding social causes that resonate with your brand’s values and really committing to them makes a powerful brand story that you can’t get otherwise.
3. Lower Costs
Doing a thorough audit on the energy and materials your company consumes and cutting back on what’s unnecessary is a great initiative for Environmental CSR. But not only that, it has the added bonus of being budget friendly. For example, between 2005 and 2015 Walmart sought to double its fleet efficiency by increasing the number of fuel-efficient delivery trucks it operated. By 2015, the company could deliver 830 million more cases of products to its stores while driving 300 million fewer miles, which was an improvement of more than 84% over its 2005 baseline and which allowed the company to save nearly $1 billion in the process.
4. Capture of New Markets
Implementing an effective CSR strategy can help companies gain access to new markets and can create favorable conditions for doing business in those markets. When the global telecommunications giant Vodaphone decided to enter the mobile phone market in Kenya, they decided to leverage not just the communications products and services Kenyans expected the company to provide, they also implemented a long-term CSR strategy focused on providing access to digital banking facilities, which the company thought would foster entrepreneurial activity, thereby creating wealth through economic activity, job creation and trade.
So, maybe now you’re excited about pursuing CSR, and that’s great! Just one last bit of advice from us—whatever CSR activities you choose to do, it has to be genuine.
For example, if you really want to commit to gender equality in wages, perfect! But before you spend millions of dollars making a commercial to spread that message like Audi did in 2017, make sure you’re living up to that belief. Audi was criticized when the ad came out for their disproportionately low percentage of women in leadership positions. After all, how can you pay women equally to men when you’re not even giving them the opportunity to take on similar job positions?
SIVENTH is here to help you with all things CSR. If you want a free consultation, if you want to know more about our CSR as a Service membership, if you want us to give seminars, shoot us a message here;