Save money, save the environment – Business benefits of corporate social responsibility
As the owner of a business, taking the right initiatives to manage the brand image alongside generating revenue is part of your job description. But now, brands have been bringing forward another concept into the corporate world.
They are becoming more socially responsible. Rather than focusing entirely on the bottom line, companies are looking into corporate social responsibility (CSR). Many are adjusting their business strategies in order to create a positive impact on society and the environment.
What is CSR?
You’ll be surprised to discover that this is not some new fancy term. In fact, the ideology has its roots in corporate philanthropy, something which can be dated back to the 1800s. But Corporate Social Responsibility truly began to take hold in the US back in the 1960s.
CSR means that a business is accountable to a community, customers, and shareholders for its actions and operations. The concepts encompass a variety of issues, such as taking into account the social, economic, and environmental impacts of a business. It includes aspects such as how practices are affecting employees, local communities, customers, the environment, human rights, etc.
How can CSR help my business?
To a deeper extent, Corporate Social Responsibility (CSR) is more than merely worrying about turning off the lights at night or recycling paper products. Yes, while these practices do help cut down costs and, without a doubt, benefit global health, CSR can also offer a myriad of other benefits to your company as well. Here are just a few of them:
Boosts brand image and recognition
When a business does something valuable for a community, the media, customers, and stakeholders view the brand in a good light. It’s that simple. CSR is an incredible reputation management tool. It offers businesses the opportunity to demonstrate their values as well as communicate with the public about the choices they make. Moreover, it highlights the common goals that companies and society aim at achieving.
92% of consumers have a more positive image of companies that support social issues and environmental efforts. For example, Zappos donates shoes to charitable organizations while Manuel Diaz Farms makes all efforts for a greener environment.
Using CSR can help you engage with customers as well as employees. Current trends are focusing on opening lines of communication. Whether it is a brand’s approach to environmentalism or energy efficiency, people love to further change for the better. After all, the prosperity of a society is intertwined with the success of businesses.
When customers and employees know and understand a business’s core values and initiatives, they are more willing to hop on board and promote a good cause. 87% of consumers will purchase a product because a company advocated for an issue they cared about. For instance, Walmart raises awareness about the environment in order to influence the product choices people make.
When businesses facilitate dialogue between consumers, it is good for lead generation and brand loyalty. So CSR strategies have shown to improve consumer trust, company recommendations, and brand sentiment, which all inadvertently point to increased revenue.
However, studies show consumers are prepared to pay a 10% higher price for premium products they deem to be socially responsible. According to research from Tilburg University in the Netherlands, more impressively, 66% are willing to pay extra to patronize companies that are committed to CSR.
Promotes reputation management
Millennials and Generation Z are more socially responsible. They prefer interacting with brands invested in improving society and look for solutions that foster these improvements. CSR increases company accountability and transparency. This enhances a positive business reputation.
For example, IKEA, an environmentally responsible company, recognizes the environmental implications of using wood for all its products. So it uses a form of modified sawdust. It’s honest and clear about where the materials come from, and this is what consumers want.
Building a responsible business image leads corporations towards acquiring a competitive advantage. Not only do customers prefer to deal with socially responsible companies, but other businesses do too. They choose to interact with like-minded brands. Moreover, investors are more interested in interacting with them. So acquiring capital as well as availing business opportunities are more accessible.
By introducing energy efficiencies, recycling, or waste management, operational costs can be reduced. When resources are utilized appropriately, the financial performance of the business can be enhanced, not to mention the considerable benefit on the environment.
Johnson & Johnson is an excellent example of CSR. It has been reducing its impact on the planet for three decades. And it continues to seek out renewable energy options, aiming to procure 35% of energy needs from renewable sources.
How to maximize your CSR approach
Everyone loves to promote a good cause. 88% of consumers want brands to help them.
So it’s your job to tell them about your intentions, whether it’s through advertising or a press release. It’s one sure way of getting consumer support. Moreover, it is an ideal way to develop a company’s online reputation.
Here are a few tips to get you started in the right direction:
Align your efforts with the brand image
Focus on a few charities.
Start with the local community before going global
Encourage customers to support your cause
Create awareness about your goals
Doing ‘a nice thing’ is great. But now more than ever, businesses are discovering how it has become a necessity for success. CSR should be an embedded habit in the way that your company operates. Therefore the focus needs to be on implementing practices that are ethical, transparent, and contribute to the welfare of society.
And as corporate responsibility continues to mature, a new structure of Benefit Corporations (B-Corps) is developing and gaining strength. Business is now being used as a force for creating and promoting good. More importantly, brands understand that in order to remain successful, their customers and communities need to be happy, healthy, and vibrant.
So the question is, are you doing your part? It’s time to amplify your CSR initiatives and leverage your CSR program.
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