In a 1970 Times Magazine article, Milton Friedman told the world that CSR “revealed a suicidal impulse” in businesses.
He may have been right back then, but in today’s world, where social media enforces accountability and younger generations are increasingly socially aware, a well-thought-out CSR initiative represents an opportunity to turn morality into money.
Are you satisfied with how much your business gives back? What are you doing to incite positive social impact? Merge your social responsibility with business-mindedness by learning 4 key ways CSR can boost your business’s profits.
What is CSR?
Corporate Social Responsibility (CSR) is the extent to which a company manages its business processes to generate profit, while having a positive impact on the community and minimizing any adverse impact on the environment.¹
Corporate Social Investment (CSI) is one of the sub-components of CSR. It is any social development project that is not undertaken directly for purposes of increasing business profit.²
Where social responsibility meets the bottom line
1. Your corporate reputation matters
In a 2017 international survey, 88% of consumers said they were more likely to buy from a company that supports and engages in activities to improve society.³ Another survey from Net Impact found that 53% of workers felt ‘a job where I can make an impact’ was important to their happiness.4 The prevailing theory in the CSR space suggests that the Millennial generation is behind this trend.
With Millennials – the largest living generation – overwhelming the workforce and consumer population, building a reputation as a good corporate citizen can give your business a competitive edge.
But stay clear of shortcuts – your social investment must be sincere. Millennials’ are characteristically suspicious towards business motives and maintain a strong presence on social media. Deceptive or destructive business practices quickly fuel conversations online, making your organisation more accountable than ever before.
Still, recruitment and customer satisfaction aren’t all.
With sustainable business practices forming part of a solid CSR strategy, you’re more likely to attract investors. Plus, in countries like South Africa, where your BEE scorecard gets you access to a large proportion of contracts, CSR can allow you to capitalise on a lot of lucrative deals.
2. The role of social responsibility in marketing
A socially responsible reputation can be applied to strengthen your marketing and better your brand. In fact, this practice is so common that the term “corporate social marketing” (CSM) has been adopted.
Did you know? It was brands’ early grappling with consumers’ demands for more responsibility that led to the development of the first CSR initiatives during the civil rights movement in the 1960’s.5
Through CSM, marketers capitalise on society’s mounting interest in ethical business activities by making their social responsibility known, thus increasing their ultimate Return on Investment.
CSM is possible because CSR:
- Generates interest and enquiries around your business and its operations
- Provides the opportunity to share positive stories online which spread over social media
- Incites free media coverage and positive publicity at no extra cost to business
But with the power of CSM comes the responsibility not to abuse it. Ever heard of greenwashing?
To spend more time and money claiming to be “green” through advertising and marketing than actually implementing the relevant business practices.
The global “Greenwashing List” exposes companies whose dishonest CSM efforts have had the opposite effect to what was intended, a testament to the fact that now, in the Information Age, your business can’t get away with being irresponsible.
On the other hand, when you’re doing “right” and remarkable things, people will like you, they’ll talk about you and marketing becomes easy and rewarding.
3. Corporate social responsibility and employee engagement
In fact, 53% of Millennials would work harder if they knew they were making a positive social difference.6 With happy employees who feel connected to your organisation’s purpose, strong relationships and teamwork are inevitable, as individuals are unified by a common cause.
But that’s not all. By structuring a CSR strategy around your company’s primary service, your employees’ quality of work can be maximised even further. CSR can serve to strengthen and extend the skill sets of your employees, which can then be applied in your workplace.
The common thread: Not only are staff sharpening their skills, but gaining an understanding of the wider impact of your business, which can present opportunities to develop new business ideas, products and services.
Unilever, one of the world’s oldest and most successful multinationals in consumer goods, uses the “lens of sustainability” across all research and development efforts.
The result? According to the global Head of HR, Geoff McDonald, if it weren’t for Unilever’s CSR focus, the company would never have been able to innovate the impressive and remunerative breakthrough products that they have:
“Making sustainable living commonplace for our consumers is helping to drive profitable growth. By reducing waste and material use, we create efficiencies and cut costs. By looking at product development, sourcing and manufacturing through a sustainability lens, opportunities for innovation open up. We believe growth and sustainability are not in conflict.”7
4. Secure your company’s future
Done right, CSR is not something for the short term.
It’s all about achieving long term results and business continuity. Think of CSR as “shaping a more sustainable society” and a stable social and economic environment in which your business can continue to operate and grow.
By focussing on how your business – who you are and what you do – can make a positive difference in your community, you can create real public value. And by ensuring that you’re also benefiting from the value created, your CSR initiative will last.
How to make CSR work for you
Start by brainstorming: Could your business benefit from a new CSR initiative or the optimisation of a current one? Use this CSR Toolkit to kick you off your strategy.
Then, present your ideas to your colleagues. If you’re onto something good, you’ll be respected for your efforts and your career may benefit. If your idea is implemented correctly, your business may benefit. And if everything goes according to plan, you could be the start of something bigger.