This increasingly prominent concept refers to a company's social accountability not only to itself, but also to its shareholders and the public. Once implemented, corporate responsibility will have a positive trickle-down effect to employees, to the environment, to the business itself, and society as a whole.
The latest consumer trends all suggest that socially responsible companies have a competitive edge; to illustrate why, here are seven reasons that outline the importance of corporate social responsibility, and how the adaptation of this self-regulating strategy can change the world of business for the better.
It's Crucial to your Employees
Understandably, employees prefer to work for businesses that treat them well and with respect. Therefore, within your own four walls, you can attribute your CSR strategy as a direct contributing factor to your team's morale and productivity. Word of how you treat your employees — be it good or bad — will inevitably make its way into the public eye, so it's in your best interest to demonstrate how your company is setting the bar for corporate social responsibility.
When you get this right, you will have a team of more energetic, emotionally invested, dependable, and loyal employees. Additionally, by exposing your commitment to fundamental human rights, you are more likely to draw in the very best candidates during future hiring cycles.
It's Critical for the Environment
In every sense, we are aware now more than ever of the importance of taking care of our environment; therefore, as a business owner, you have both a social and corporate responsibility to do so. This means identifying how your industry is affecting the wider picture, such as a cosmetics company avoiding unethically sourced palm oil (a major factor in deforestation).
It's not just the planet that benefits, either. Companies that are paying particular attention to the environment have an increased chance of being covered by the media and having their services or products shared both verbally and online. This results in increased brand awareness and recognition amongst potential future customers and clients who were previously unaware of your company, and who were perhaps electing to spend their money on a competitor.
It's Necessary for Humankind
Many consumers are becoming increasingly aware of the importance of ethics, including the treatment of workers at home and abroad. As younger shoppers – such as millennials and Gen Z – put increasing emphasis on corporate behaviour, companies are being forced to follow suit and shift toward sustainably sourcing their materials and ingredients. Other contemporary issues, such as child (or forced) labour, gender equality, fair monetary compensation, and workplace safety are also things that your company can look to tackle as part of a defined CSR strategy.
In 2019, consumers don't want to feel as though their purchases are a product of human misery; instead, they want to be socially conscious in their choices and feel that the company they are buying from are making a positive impact on the world.
It is a Public Relations Win
Most people would agree that one of the qualities of a good leader is the ability to think about how their actions (for example, the sourcing of materials or treatment of the environment) will affect the world around them, be it positively or negatively. By carefully considering this and working towards the prevention of causing harm, it will become clear that your company's management consists of people who are socially responsible in their ethics, and who want to make a positive impact on the society that they work within. As a result of a positive reflection on your business' upper-level management, the company's public relations (PR) will also receive a significant boost.
It Will Benefit your Company Financially
Based on figures from a 2015 study by Cone Communications, 91% of global consumers expect businesses to operate responsibly, while 84% claim that they seek out sustainable and responsibly made products whenever it is possible. When considering statistics such as these, the importance of CSR becomes obvious not just in terms of helping the planet, but also in terms of financial success for companies that choose to adopt this strategy.
When your company proves its investment in ensuring that you are running in a socially responsible way, you will develop a sense of emotional loyalty amongst your customers as a result. This is because your brand and product will elicit a positive emotional response from your patrons.
It Sets a Strong Example
Upon seeing how successful your business is as a figurehead for social responsibility, other companies will recognise its importance and seek to adopt a similar brand strategy. Without having to interact with any external establishments directly, you will be setting an example in business and serving as a role model to the ever-growing socially responsible world that we live in.
This is perhaps the most critical point here; as the name suggests, you have a responsibility to adopt and implement a CSR strategy. All people are accountable for the welfare and wellbeing of the world around us, but when you decide to launch a business, you then have an added sense of corporate responsibility too. Remember: no company is exempt from ethics, regardless of the industry that it operates in, who is working for it, or the products or services that are offered.
Though these points highlight the importance of corporate social responsibility, they are ultimately just the beginning of many conversations that need to be had on the subject. By adopting this self-regulating strategy into your own company's functioning, though, you can set about changing the world of business for the better, and setting an example of how other industries should — and eventually will — operate.
What do you think? Should smaller businesses be doing more in this regard? How does your company approach CSR? Let us know your thoughts in the comment section below.