What is corporate social responsibility?
Businessdictionary.com defines corporate social responsibility (CSR) as a sense of responsibility toward the community and the environment that companies incorporate into their business models. It can be by contributing to the fields like education or sustainable development or by “earning adequate returns on the employed sources.”
Businessnewsdaily says that CSR positively affects social, economic and environmental factors. It names for types of corporate social responsibility: environmental, philanthropy, ethical labor practices and volunteering.
Canadian bank BDC explains how companies could benefit from corporate social responsibility. Good reputation, attracting talented employees and saving money through efficient operations are among those benefits.
How important is CSR for customers and investors?
BDC says that companies are highly concerned about CSR, because if the community does not like the way they do business, their public image might suffer or they can lose some of the customers.
2017 Cone Communications CSR study has revealed that 63% of Americans hope that businesses will contribute to social and environmental changes. The majority will buy a product because “a company advocated for an issue they cared about.” About 76% will not purchase a company’s product if it goes for different beliefs rather than what it says it stands for.
Research and consulting firm Clutch published a survey in the beginning of 2019 showing that people are drawn towards environmentally-friendly businesses with social responsibility strategies. A majority of those asked by Clutch support companies that share similar values and would not be interested in those that do not. More people named being environmentally friendly as one of the top attributes, compared to those who said price is important.
Customers are not the only people who pay attention to the company’s CSR. Forbes says investors are also more drawn to “socially responsible investing.” A research published by Oxford University revealed that a great majority of investors want companies to report more on environmental, social and governmental factors (ESG), so that they could know where to invest. Forbes says that this trend will continue further in 2019 and investors will request more transparency from companies.
Resources for reporting on CSR
To start, get yourself familiar with the vocabulary. Here are some terms that may be useful for starting point:
- Sustainability report – According to Global Reporting Initiative, a sustainability report is a report by a company or organization about the economic, environmental and social impacts based on its daily activities.
- ESG – An abbreviation for environmental, social and governmental factors.
- CRM – An abbreviation for cause related marketing. Based on the Financial Times, it’s a form of marketing where a company partners with a nonprofit organization in order to create business value and social change.
- CCI – is an abbreviation for corporate community involvement. It’s a form of corporate social responsibility that is focused on broader community programs.
Satell Institute can be a useful resource for learning more about CSR terms.
Learn more about those companies that do it well. TOMS is an American shoe company that works with 100 partners to help those in need with water, shoes and other issues. CRS and Sustainable Development commitments media platform offers the data about top 100 companies with the best CSR reputation.