The general population has become increasingly aware of social and environmental issues, which by no coincidence, concurs with numerous NGOs around the world popping up to show corporations and individuals theethical way. Businesses, both big and small, are more responsible for their impact than ever before, largely due to the internet which facilitates the fast assimilation of information and unites the voices of those who previously stood alone in their respective battles for good. With widespread condemnation spreading throughout the global network at a click away, companies must take involved steps to avoid wrong-doing and damning rhetoric. In the same respect, the public demands a greater level of respect in terms of ‘corporate humanitarianism’. “Companies are recognising that consumers are not interested in buying ‘responsible’ products from companies that are not known for being ‘responsible’ themselves,” says John Friedman, Corporate Responsibility Communications Director for facilities management firm Sodexo. Complying with this growing demand conjures up a greater image of an organisation in the mind of the customer or perspective business partner, an invaluable tool in the midst of cut-throat competition and evolving consumer needs.
Implementing CSR policies can go a long way in promoting both customer and employee engagement. Incorporating CSR in a business model acts as a mechanism to reach out to the public in new ways; ways that get people talking, sharing and ultimately consuming more. Projecting the image of ethical practices, such as sustainable sourcing, fair treatment of employees and being charitable, can focus the public’s spotlight onto these praiseworthy policies, and so onto the firm from which they come. According to a study carried out by Cone Communications and research firm Echo, 90 percent of those surveyed said that they would stop buying a product if they learned of a company’s irresponsible business practices; while 92 percent would buy a product with a social and/or environmental benefit, if given the opportunity. Figures such as these indicate a growing social consciousness that make it not only favourable to implement CSR policies, but mandatory to do so.
The saying ‘a happier workforce is a more productive workforce’ is as true as ever and has proven gains in enhancing employee creativity. According to a study carried out by Dale Carnegie and MSW Research, firms with staff that feel more engaged perform better than companies with unengaged employees by up to 202 percent. Furthermore, CSR policies create a positive work environment, which is conducive for retaining staff and talent. A company’s involvement with NGOs can go a long way in engaging employees. There is a growing trend of companies adopting gift-matching practices, whereby an employer makes a donation to the chosen charities of its staff and may even pay employees for the time they take to volunteer. “By matching donations from employees to causes employees select, companies are able to provide a bottoms-up approach to corporate philanthropy. In the long-term this creates an engaged employee base who are proud to work for the company,” says Adam Weinger, President of Double the Donation, an organisation that facilitates employee matching-gift programmes.
Implementing CSR can lead to breakthroughs in improving a product or business model. Therefore, the long-established “bottom line” of the corporate world is no longer the ultimate defining factor for a company’s success; the “triple bottom line”, a term coined by sustainability consultant John Elkington, insists there are now three such factors: profit, people and the planet. By considering all three, ideas can spill over from one area to another, in ways that were not previously imagined.
Common approaches are to evolve packaging or source locally, both of which can significantly reduce the overall outlay of a product, including its transportation costs. Such methods have obvious environmental benefits in reducing a company’s carbon footprint, a hot term nowadays, but can also drastically alter profit margins. For example, manufacturing company Sidel has announced a new type of PET bottle that can considerably reduce the mounting waste of beverage packaging. According to figures from Euromonitor, over 256 billion PET bottles for water and carbonated soft drinks were produced in the world last year, meaning that adopting this lightweight technology could equate to over €1bn in cost savings for the industry.
A growing number of brands are following this trend of packaging innovation, allured by cheaper production costs, a smaller environmental impact and a better company image; examples include Crest’s toothpaste tubes, make-up packaging by Estee Lauder and Coca-Cola bottles. While the notoriously unethical superstore chain Wal-Mart, is also attempting to make a difference by introducing a packaging scorecard to its suppliers.
Implementing CSR practices is increasingly vital for a company’s sustainability and enduring success. “The long-term benefits are nothing less than the long term viability of the company. So, effectively managing the relationships with your customers, employees, owners/investors, suppliers, competitors, communities and government agencies and regulators, is key to maximizing company valuation and building a sustainable company,” says Friedman.
“Done right and when truly integrated, CSR measures can help a company hit its revenue goals (because of higher employee productivity), experience better stock performance and secure a precious and enviable brand reputation for being responsible,” Vice President in Edelman’s Business and Social for Purpose team, Aman Singh, tells European CEO. Good publicity and more media opportunities are thus generated by implementing CSR policies. This can do wonders for an organisation’s long term business strategy; not only because it acts as a great instrument for advertising, but also because it exposes a company to fresh opportunities for forging new partnerships and growing its network. The imperativeness of CSR is not only the future for business, it has already arrived. Those adopting socially and environmentally beneficial practices are already reaping the benefits; while those who choose not to do so, will simply be left behind as the rest of the world progresses in greater harmony.
(European CEO, 2016)