The term “corporate social responsibility” (CSR) seems to be popping up everywhere. It’s not a new concept, though — and it would be a mistake to ignore it as business jargon or dismiss it as just the latest trend.
CSR refers to businesses adopting practices and initiatives that benefit society. The term was once tarnished by being used to describe a company’s attempts to save face after a problem became public. For instance, BP and Exxon Mobil made a number of very well publicized charitable donations to community and environmental groups after the Deepwater Horizon and Valdez oil spills.
Since those disasters, corporations have learned that people “vote with their wallets” — and that irresponsible behavior doesn’t get erased in the public mind by a socially responsible gesture after the fact. True CSR is proactive, not reactive; a way of doing business, not a crisis PR tactic.
Financier Worldwide has called CSR “one of the standard business practices of our time.” What’s more, large companies such as Walmart, Ben & Jerry’s, Nike, Subaru, McDonald’s and Target make marketing their social responsibility a top priority — and you should, too. Here’s why.
Doing good looks good
Marketing social responsibility is a way to let consumers know they’re doing business with “one of the good guys.” It’s a boon for public relations, because customers — and the media — take notice when a business shows it is committed to more than just profit. Companies that take action to improve the health and welfare of society, whether at the local, regional, national or global level, reap the benefits of consumer loyalty.
A 2014 Nielsen study found that 55 percent of global online consumers from 60 countries will pay more for “products or services from companies that are committed to positive social and environmental impact … ‘Consumers around the world are saying loud and clear that a brand’s social purpose is among the factors that influence purchase decisions,’ said Amy Fenton, global leader of public development and sustainability, Nielsen.”
One way to demonstrate social responsibility is through donations. Very large corporations have donated huge sums in very visible campaigns — like the Walmart donation of $301 million in 2015. Subaru of America’s “Share the Love” program donated nearly $90 million over 9 years to organizations including the ASPCA, Make-A-Wish Foundation and Meals on Wheels. In 2016, the car maker announced an advertising campaign “showcasing real stories from real people who had been positively impacted” by the program.
Not just for the big guys
Smaller businesses can’t make headline-grabbing donations. But the practice of donating is more important than the amount. And remember: Making donations is only one way for businesses to give back.
A business of any size can take steps to become more environmentally friendly, such as starting a recycling program, converting to energy-efficient light bulbs or reducing packaging. A business could commit to using locally sourced goods, sponsoring a community garden or a Little League team, encouraging employees to take part in a charity 5K or giving them paid time off to do volunteer work.
Whatever your business does to give back, be sure to get the message out via regular updates on social media and your blog. Share pictures of the Little League team and your employees at that 5K. Write about the success of the recycling program. All will pay dividends in the number of people who know, like and trust your business.
What’s the bottom line?
Companies that embrace corporate social responsibility can measure some of the ways that it reduces costs (i.e. lower energy bills) or increases revenue (i.e. more repeat customers). But it’s hard to measure how much good deeds are “worth” in dollars and cents. The prevailing view is that the true worth is in the boost to intangibles such as brand recognition, business reputation and employee morale.
Increasingly, shareholders are paying attention to the intangibles because they affect the stock price: According to an article on media platform Devex Impact, a 2009 study by the Bank of Finland found companies’ stock price dropped an average of 3 percent when those companies were removed from a corporate social responsibility ranking list. When companies were added to that list, their stock price jumped about 2 percent.
And of course, there’s one benefit that’s priceless: knowing that your business exists not just to turn a profit, but at some level, to change the world for good.