The world constantly keeps changing and so do customer expectations. Today, businesses are being held to a higher standard than they were in the past. They are expected to address social and environmental issues. Being socially responsible is no longer mandatory regulation but a business growth strategy. Today, customers are more inclined to associate with businesses that are proactively working towards addressing social and environmental issues by proactively taking Corporate Social Responsibility initiatives.
CSR is an ethical way to elevate the corporate responsibility of your business, your employees, and society. It is a framework through which companies can give back to society while meeting the needs of shareholders, employees, and customers. It includes non-financial activities like creating a positive image for the company, demonstrating core values, and committing to do good in the communities where they operate.
Importance of CSR in today’s world
"We think, therefore we act. We act, therefore we sustain."
Businesses should be built on a foundation of sustainability and social responsibility. Profits will follow. One of the core values is - In order to thrive, we must lift both hands, one is for helping ourselves and the other is for helping others. CSR is a crucial part of running a business, and it's something companies should consider practicing actively. Simply put, it should be a ‘must-have’ for businesses.
Today, consumers are conscious of the impact their buying decisions have on the environment. They concern themselves with what businesses do with their money and hold corporates accountable for negligence towards society. If your business has not demonstrated a commitment toward CSR, you risk losing customers who are making a conscious decision to support companies that value sustainability. Therefore, incorporating CSR efforts will help you retain customers you already have and attract new ones who share your values.
Here are some more beneficial factors that speak volumes about the importance of Corporate Social Responsibility for every business.
- Positive brand image
Being seen as a positive brand will help you widen your consumer base and attract new customers. When potential customers see your staff giving back to the community, they realize you’re a brand committed to helping others for the social good. This makes you a favorable brand and more customers are likely to associate with you.
- Cost efficiency
Cost saving and sustainability? Not a bad combo, is it? Many simple changes result in significant financial savings for your business, such as using less packaging, purchasing locally, and increasing efficiency through better processes. Through CSR activities you can educate your workforce about the importance of reusing and recycling, thus saving money for your business.
- Brand awareness & recognition
CSR is a great way to boost your company's reputation and improve your chances of attracting the right customers. More people will hear about your business if you're committed to ethical practices. This leads to good word of mouth among the community and improves your brand awareness, which eventually translates into more sales.
- Employee retention & engagement
Employees look for a higher purpose other than their monthly salary. Employees enjoy working for companies that have a positive public image. CSR initiatives incorporate volunteering programs that foster values such as empathy and loyalty leading to better teamwork and camaraderie among employees. Employees at CSR-oriented companies are happier, less stressed, and have better relationships with their colleagues. This results from the fact that they get to create a difference in society. CSR can prove to be a great aid in increasing employee engagement and retention rates.
The Scope of CSR
- Human Resources
CSR is concerned with the impact of organizational activities on the people who constitute the Human Resources or assets of the organization. These administrative activities include training programs, recruitment practices, stability of the workforce, promotion policies, etc.
- Fair Business Practices
CSR is concerned with the relationship of the company to special interest groups. Special interest groups include minorities, employment of women, and employment of other special interest groups. This area also deals with socially responsible practices abroad and support for minority businesses.
- Supply Chain
Corporate Social Irresponsibility in the supply chain has greatly affected the reputation of companies, leading to a lot of costs to solve the problems. Ensuring that providers have appropriate CSR policies, ethical trading, elimination of pollution and non-recycled packaging, and eliminating exploitative labor practices amongst contractors.
- Employee Volunteering
Employees are encouraged to get involved in CSR activities for a good cause. Along with experience, employees accumulate an arsenal of talents on their way. The spirit of volunteering encourages the personal and professional growth of the employees. Additionally, the workplace becomes a more positive and productive place to work.
- Community Development
Organizations can expand their CSR initiatives to community development activities. This would involve health-related activities, education support, encouragement of arts, and other community activities. Through community development activities, organizations can not only offer better and healthier living but also provide a platform for like-minded individuals to come together and explore new ideas.
Business strategies and Corporate Social Responsibility are not at odds. They are not mutually exclusive, rather work together to build long-term success and a positive difference. The scope of CSR isn’t and shouldn’t be limited to simply donating to charities. With a little effort and thoughtful strategies, organizations can truly make a difference in various aspects of society.