Corporate social responsibility (CSR), sometimes called corporate citizenship, is an umbrella term that refers to any effort a business makes to give back and to improve society in some shape or form. It can involve donating to charity, making employee-friendly corporate policy, making environmentally-friendly corporate policy, and more. It has a number of benefits for your business and even though it typically requires monetary investment to develop and implement the programs, can often yield a strong return on investment that helps grow your business.
Gives Your Company Purpose
Developing social responsibility programs gives your company a greater purpose than making sales. In fact, it can provide more motivation to do well as a company, because the better you do in terms of sales, the more you can do for society. When you feel good about what you’re doing, it makes it more fun and enjoyable to do. And when consumers know they’re contributing to the purpose, they’re more likely to continue doing it…which brings me to my next point.
Builds Loyalty with Customers
Today’s customers are more conscious about who they spend their money with, and want to do business with companies they know are working toward something better. According to Double the Donation, 55% of consumers are willing to pay more for products from socially responsible companies. Data from Cone Communications shows that 87% of consumers say they’ll purchase a product because the company advocates for an issue they care about, while 76% say they’ll refuse to purchase products if they determine a company supports an issue contrary to their belief. CSR is now one of consumers’ purchasing criteria alongside price, quality, and convenience, but their view of responsibility continues to evolve.
Reduces Employee Turnover
When you’ve got CSR programs in place aimed at your staff’s overall well-being, the team is happy. And when the team is happy, they’re more productive, and much less likely to leave their position with your company. Double the Donation reveals nearly 60% of employees who are proud of their company’s CSR are engaged at their jobs.
When you consider the cost of employee turnover on average, is 16% of annual salary for anyone earning under $30,000, you’re spending $3,328 to replace an employee who earns $10/hour. It averages 20% for midrange positions, or those earning between $30,000 and $50,000 a year. And for a high-level position? You could be spending up to 213% of the annual salary. Plus, there are many things that aren’t tracked and intangible, such as the cost of hiring a new employee, cost of onboarding, the lost productivity, training costs, and the impact on company culture.
Building CSR into Your Business Strategy
Your CSR approach needs to be unique and customized to your business industry and goals. To help you decide which initiatives you want to begin with your organization, answer these questions:
How Does Your Business Impact the Environment?
Are you using products and services that are harmful to the environment? Can you switch suppliers to use more eco-friendly products? If not, could you start a carbon-neutral program to offset what you cannot reduce? Maybe you can host an annual tree planting event. Consider adding recycling stations throughout your office to make it easy for employees to recycle. Change the light bulbs in your office. Even small actions can add up to make a big impact.
Take for instance, Lush Cosmetics. The international health and beauty company makes a variety of products, such as shower gels, shampoo and conditioner, and makeup. Many of the products are “naked” meaning they do not have any kind of packaging, and there is a recycling program with customer incentives to promote recycling the plastic pots that hold products that must have packaging.
Their ingredients are sourced with fair trade practices, from sustainable sources. The company also donates to a variety of grassroots organizations with a focus on human and animal rights.
How Can You Improve Your Labor Practices?
What do your employees need to make their lives easier? Could you allow them to work remotely? This not only helps reduce the carbon footprint because there is no need to commute and you can downsize or even eliminate corporate office space, but gives employees a bit more freedom and flexibility.
Maybe offer a more flexible paid vacation policy? You don’t have to go all out like Netflix and include unlimited vacation with a year’s paid salary for new parents, but providing benefits to cover sick days can take some pressure off your team and foster a healthier work-life balance.
While Starbucks doesn’t offer unlimited vacation, they do provide college tuition for their employees, and are committed to hiring veterans and refugees. They have a number of environmental elements to their program, too, including 99% ethically sourced coffee, farming partnerships for responsible agronomic practices, and more.
What Do You Believe In?
What causes do you support personally, that you can rally the rest of your company to support? What charities and causes make sense to include as part of your CSR program? While you may be an animal lover, if your business has nothing to do with animals, you may have a hard time convincing everyone to get on board. Generally, for the program to make sense, it has to improve the way your business operates, or contribute to a cause related to your business. It’s why you see companies like Purina donating food and supplies to animal shelters, and why Lyft has a carbon offset program to make every ride carbon neutral.
Ultimately, after you’ve built your corporate responsibility program, you must be prepared to promote it. If people don’t know about it, it won’t be the tipping point in what could make them decide to become one of your customers. And if you don’t keep people up to date with what kind of impact your program is making, you can’t expect people to remain dedicated to your brand as a result.