Corporate Social Responsibility (or CSR for short) is probably a term you’ve heard lots over the past few years. It’s been around since the 80’s but there’s been an increasing focus on the importance of CSR over the past decade.
It’s one of those terms that sounds very official – but there’s a strong chance you’re already doing some of it!
What actually is CSR?
Well, that’s a good question. While many academics have tried to quantify exactly what CSR is, there still isn’t a formal definition. Broadly, CSR is how businesses manage themselves and their practices to produce a positive impact on society. It covers aspects of sustainability, general social impact and ethics with a focus of how this is integrated within the business as opposed to just being an add-on.
Why’s it important?
At the very simplest level, operating your business in an ethical and sustainable way is important – full stop. It may seem to some that tackling these issues is more of a government problem. However, societal opinion very much emphasises the responsibility of businesses to get involved with these initiatives.
In 2017 a huge 86% of consumers reported that they expect businesses to operate responsibly towards the environment and society. Suggesting that as a business you should not just care about your profit margins, but the wider society as well. In fact, it might even help profit margins, but more on that later.
What does this mean practically?
Here are two examples of companies that have particularly strong CSR programs:
Microsoft: They invest in clean energy infrastructure, have company-wide volunteering programmes, and the Microsoft YouthSpark program has provided educational, employment and entrepreneurial opportunities for over 300 million young people globally.
Timberland: They have a clear dedication to using sustainable products and creating a purpose in the community. They plant millions of trees, run thousands of community service programs, have zero waste initiatives and recycle old footwear - to name a few.
The business case for CSR?
There is a strong business case for the integration of CSR into a company’s activities. Yes, some of it costs money, but ultimately customers expect it. Generally, there is a business case for CSR that it drives innovation, trust and transparency, boosts long term profitability, improves public image and can even offer direct cost savings.
A way that can reduce cost longer term is looking at your sustainability and usage. For example, looking at ways to reduce packaging, shorten the supply chain and use less energy in the office are all areas that benefit both the planet and businesses.
CSR has also been found to make employees happier, if they believe they work for a company that does good, and acts in line with their personal beliefs (at least to some extent). Research has found they’re more likely to feel like they have a purpose within the organisation, which then makes them more likely to stay.
But what about SME’S?
Of course, it’s easier for huge multinationals to implement CSR policies and have a wider reach – but there’s lots that all businesses can do.
For smaller businesses CSR offers something incredibly important – product differentiation. While you may not be able to compete with bigger companies on price, you can offer a product or service that means more to your customers. A product made by staff that earn a good wage, with materials that are locally sourced. Or a service that they can see benefits the wider community, not just the CEO’s pockets.
Easy ways SME’S can get involved:
Donate a % of profits to a local charity, encourage professional growth for you staff, volunteer in the local community, commit to energy saving policies, look at how you can reduce your plastic waste or carbon footprint… there’s lots!