What is Corporate Social Responsibility (CSR) and Why Does It Matter?
Once, a business’ only responsibility was to turn a profit for the owner. It remained largely unchanged for centuries, but as the 18th and then the 19th centuries dawned, new ideas began to circulate. Businesses began to be seen as having responsibilities toward their employees, toward their partners and suppliers, and more. Today, the situation has changed even further and the idea of corporate social responsibility has taken root.
Corporate social responsibility includes a range of ideas about what corporations owe to society at large or to the consumers that they serve. Although CSR is not itself a mechanism of the sales process, it plays a huge role in determining a company’s public brand identity.
What is corporate social responsibility (CSR), though? How is a corporation responsible to the community around it, or to society itself? Is it nothing more than a catchphrase used to help bolster a brand’s image? What does it mean for a company to uphold their corporate social responsibility? What gives CSR meaning?
WHAT IS CORPORATE SOCIAL RESPONSIBILITY?
CSR stands for Corporate Social Responsibility. As far as the corporate social responsibility definition, the International Organization for Standardization states, “Businesses and organizations do not operate in a vacuum. Their relationship to the society and environment in which they operate is a critical factor in their ability to continue to operate effectively. It is also increasingly being used as a measure of their overall performance.” The ISO goes on to explain that organizations require guidance on how to operate in a socially responsible way, which means “acting in an ethical and transparent way that contributes to the health and welfare of society.”
That, at least, gives us a starting point. Corporate social responsibility is a set of practices and ideas having to do with the responsibilities that corporations have to society at large. What are those “ideas and practices”, though? Really, CSR initiatives could be anything:
Adopting eco-friendly business practices
Active participation in local eco-related events and environmental impact
Supporting charities and foundations
Adopting employee-friendly policies and practices
Ethically sourcing materials
Those are just a few basic examples. CSR can take myriad forms depending on the business or organization in question, the audience, and other factors. However, all forms offer powerful benefits, including a stronger company-employee bond, an improved public image, and the creation of a better society in which the organization can operate.
EXAMPLES OF CORPORATE SOCIAL RESPONSIBILITY
To truly understand what CSR is, why it matters, and the benefits available, we need to explore a few real-world examples of corporate social responsibility in action.
–NETFLIX EXPANDS PARENTAL LEAVE
Part of CSR is taking active steps to improve the situation of an organization’s employees. Netflix did just that in the last quarter of 2015 when the online streaming giant announced that all employees would be able to take advantage of unlimited paid parental leave. This move set Netflix apart from virtually every other business in the United States and helped them secure top talent while retaining female employees and generating positive press.
–MICROSOFT AND BILL GATES
While he might not be the actual head of the monolithic software firm any longer, Bill Gates is inextricably linked to his creation in many ways. One of those is that the company benefits a lot from the charitable actions of its founder, who’s involved in many different causes, including the Bill and Melinda Gates Foundation. In 2017 alone, Gates donated $4.6 billion in Microsoft shares, rumored to be destined for the aforementioned foundation.
–TESLA AND GREEN ENERGY
As a socially responsible business, Tesla has more or less built itself on the premise of social impact through environmentalism and renewable energy. Its most well-known products are a series of electric cars, which promise eco-friendly transportation. Elon Musk has also been involved in a variety of other society-improving causes, such as his plan for an underground hyper-loop, but to mixed success. Environmental sustainability takes a lot of moving parts to properly achieve an environmentally friendly world.
The Benefits of Corporate Social Responsibility
With a better understanding of how CSR works in the real world, it’s important to turn our eyes to the benefits offered by these ideas and practices. Some are quite obvious – Netflix’s improved retention of key female employees, for instance. However, that is just the tip of the proverbial iceberg.
Good CSR can help employees feel more engaged with your organization, and can also increase loyalty while reducing churn. That saves time, money, and hassle while providing employees with greater job satisfaction. It also contributes to a positive brand image, which means that the public at large will think better of your organization.
Businesses that practice corporate social responsibility are already on their way to establishing a positive brand identity, which they can leverage for public image and marketing purposes. A positive brand identity also gives your company opportunities to create engaging marketing campaigns centered around the kinds of stories that you want to tell about your business, thereby increasing not only brand recognition but your control over your brand’s story. For instance, by practicing CSR, you can create your own material for a new marketing campaign, as part of your overall digital marketing strategy.
Why Should a Company Implement CSR?
There are a number of reasons why a company should implement CSR. Some of the most important reasons are that it can be an important component of corporate public relations, it can help the company attract and retain top talent, and it can help the company make a positive impact in the community.
In order to implement a CSR, companies should implement it for the following reasons:
-To avoid data breaches by having a dedicated point of contact that is able to monitor and validate data
-To ensure that the company is compliant with laws and regulations like supply chain issues.
-To comply with standards and guidelines set by companies such as PCI DSS, NIST
– To create a trusted relationship with customers and local communities
– To simplify the customer service process and make it more efficient
– Company with philanthropic responsibilities around social justice as well as social and environmental causes
What are the benefits of CSR? Why is CSR important to businesses?
CSR is a backbone of the modern business process. It’s necessary for companies to have their own employee identification, as well as an easy way to access other important information like payroll and claims. Why is CSR important to businesses?
There are a variety of reasons why businesses should invest in Corporate Social Responsibility (CSR). CSR is the process by which a company voluntarily goes above and beyond what is required by law to improve the welfare of society. Some benefits of implementing CSR policies include, but are not limited to, improved public image, increased investor confidence, and reduced operating costs.
The challenges of implementing a successful CSR program
Despite the challenges, there are many reasons why a company should implement a CSR program. First and foremost, it is essential to have good management in order to have a successful CSR program. Furthermore, it can be difficult to determine the cause and effect of risk when implementing CSR programs. Additionally, relationships with regulators can suffer if a company does not have a strong CSR program in place. Finally, companies often do not have enough information about how best to implement CSR programs. Employee engagement is an important factor to get a company that commits to this business model.
Ultimately, businesses are part of society in many ways. Perhaps the best corporate responsibility definition is this: CSR is an overarching strategy focused on ensuring your organization is able to conduct business in an ethical manner while considering human rights, as well as your impact on society, the economy, and the environment.
However, CSR goes much deeper, and touches on virtually every aspect of business sustainability, growth, and success. It’s about building a strong, positive brand identity, improving public and employee perception of your firm, and telling the right stories at the right time in innovative ways that reach and resonate with your audience. One of the best ways to monitor and predict what that perception to be is to have your data analyzed for threats and opportunities so that you can move forward with confidence, budget and resources to approach the matter.
Noble Digital is a creative-performance partner that helps growth companies translate their vision into an integrated marketing strategy that performs. Noble has help growth companies like: New Balance, Mutual of Omaha, Telesign, Fundrise, and BiohmHealth to scale and hit business goals and exit goals as well as helping mid-tiers and Fortune 500s optimize their outward facing communications for maximum performance around business goals. Our Data Matrix Appraisal helps corporations tether their business goals around data insights.
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