All About Impact: Why Corporate Social Responsibility Matters

All About Impact: Why Corporate Social Responsibility Matters

CSR: it’s an acronym with weight. The term, short for Corporate Social Responsibility, was coined in 1953 by American economist Howard Bowe in his book Social Responsibilities of the Businessman. However, it wasn’t until the late 1990’s that the concept gained momentum internationally. By the early 2000’s CSR had become a core strategy for huge multinational companies around the world including Coca-Cola, Disney, and Unilever. 

Fast forward to today, and if your company isn’t engaging in CSR activities, it could possibly have a negative impact on your overall business. Research reveals that 94% of Gen Z believe companies must address social and environmental issues, and 76% of shoppers will not buy from a company that conflicts with their social views and beliefs. 

But building a CSR plan from scratch isn’t easy, especially for fast-growing startups and scale-ups. A good starting point is to take inspiration from the bigger players. Ben & Jerry’s coined the term ‘caring capitalism’ in the late 80’s and since then, has been sharing 7.5% of its profits with community organisations. Lego is another great example: the global toy brand took accountability for its high plastic use and has vowed to phase out all single use plastic in its production by 2025.  

Before diving into how to create a CSR strategy, let’s take a look at what it really means. CSR is all about building trust, generating awareness and encouraging social change at an organisational level — and here’s how you can do it too. 

What is CSR?

The Financial Times defines CSR as “a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders.”

CSR is a business model that allows companies to be socially accountable to itself, its stakeholders and the society at large. A typical CSR strategy includes the actions that a company should take to create a positive impact on the economic, social and environmental aspects of a society. Essentially, the focus shifts from only maximising profits to also defining and including the social objectives and issues a company cares about. When a company engages in CSR activities, this is also called corporate citizenship. 

Some common examples of CSR activities include reducing the negative environmental impact created by a business, employees volunteering for social causes and donations to charities. 

…And what isn’t CSR? 

CSR is often confused with brand purpose — but these two concepts couldn’t be more different. Brand purpose defines why your company exists, while CSR focuses on the positive impact your company can have on society as a whole. Your CSR activities should however align with your brand purpose and core values, as it can help you to understand what are the issues and societal changes that matter the most to your company and your customers. It’s key to think long-term here: where do you want your company to be in five or ten years down the line, and how can your CSR activities support this?

Going back to what isn’t CSR, it also excludes any projects or initiatives that are related to running a business smoothly, and activities that are beneficial to a company and its employees alone. 

Have a great sustainability program for your products that improves overall brand image? Not CSR. 

Hiring more diversely? Not CSR. 

Any attempts at greenwashing? Again, not CSR. 

The main ingredients to a CSR strategy

Now you know what counts as CSR – and what doesn’t – let’s find out how to build an impactful strategy. There are four pillars to a CSR strategy: 

  • Philanthropic responsibility
  • Environmental responsibility 
  • Ethical responsibility 
  • Economic responsibility 

A good strategy must take into account all these four factors to bring a positive impact that lasts. Here are some steps to get you started: 

Define what CSR means to your company

Key to kicking off your CSR strategy is defining and understanding your key stakeholders’ opinions and concerns. Your stakeholders could range from leaders and employees, to customers, company unions, local communities and environmental organisations that are affected by your company’s business activities. Once you understand their concerns, think about how your CSR program can address these. For instance, is your new factory or outlet going to affect the lives of local neighbouring communities and ultimately face pushback? Or if there’s a cause that your employees deeply care about — Facilitate volunteering and related opportunities that will help bring about change. 

For more inspiration, you could also look into examples of companies that are excelling at CSR, both within and outside your industry. How are your competitors aligning CSR to their company purpose, for example? And what can you do better?

Set a budget and get approvals 

From there, you’ll need to define a budget for your CSR activities. Look into local regulations to help guide your spending: some countries have set rules for a minimum contribution that correlates with your company’s revenue, and you may need to involve external authorities for approval too. 

Define your goals

With approvals in place, it’s time to set some clear goals. CSR can help positively impact your business, address existing concerns from your stakeholders, engage employees and improve customer perception about your brand. Define which of these goals your CSR strategy will be measured by, and how you’ll measure its impact. For instance, if employee engagement is one of the goals, then your KPIs could revolve around employee engagement scores and retention rates.  

Launch your CSR campaign

It’s finally the time to launch your CSR campaign! At this point, you also need to spread the word internally and externally. We advise you to inform and educate all your stakeholders about your CSR plan in advance. Before the campaign launch, draw up a communication plan and think about how you can inform and engage all your relevant stakeholders – from employees, shareholders and investors, to external stakeholders such as partners, local communities, media, customers, and followers on your social channels. 

How CSR benefits a company 

While the end goal of CSR shouldn’t be for profit, there are plenty of ways your company can benefit from an impactful CSR strategy. These include: 

  • Attracting new talent and retain existing employees 
  • Helping build a positive customer perception of your brand
  • Highlighting your company’s transparency and accountability
  • Helping build trust with investors and other key stakeholders

For businesses all over the world, CSR can bring positive change to employees, as well as the wider community and environment they operate in. Learn from the bigger companies, and do what’s within your means to pave a more meaningful way to do business. 

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