Corporate Social Responsibility
Corporate social responsibility is about being accountable not only to the stakeholders (e.g., shareholders, management, etc.) but to the local and global community. It also means that a business is run with consideration to the possible economic, social and environmental impacts of producing a product or creating a service.
This essentially means that companies are considering people as well as profit, and not profit over people, both locally and globally. They ensure that people and the environment are a priority and that they are not being exploited in the pursuit of profits for the company and its stakeholders.
– Janice Guadagno, Digital Consultant, JG Lea Marketing / Web Design
Exploitation can come in the form of underage workers, unsafe work conditions, low pay, unfair compensation for long hours, abusive work practices, and forced work, among many other possibilities. Environmental issues range from dumping toxic waste into rivers, to creating high levels of greenhouse gases.
Developing countries are eager to accommodate corporations and lure them into their territory to provide a better standard of living in their country. The jobs created often allow people to buy the basics such as food and other necessities. This means that corporations can take their production to countries that do not protect workers, and that are in such a terrible economic state, that the choices for the citizens are slim. A job, any job that allows them to feed their family, is a lottery winning for them.
This practice of tapping into developing countries keeps production costs very low and profit margins high. If production were moved to North America, minimum wage guidelines would cut into those potential profits.
What is to stop a corporation from exploiting people who are poor in developing countries aside from a sense of moral code?
In the age of digital technology, consumers are becoming more aware of exploitive practices that have occurred in the past, and present. Companies are being held accountable and consumers are voting with their dollars for those who practice Corporate Social Responsibility. As a corporation, it is a good practice to get into, not only because people are demanding it, but because it is the right thing to do.
We began to hear questions from our customers that we had never heard before: ‘what’s your company doing for the environment?’ and we didn’t have answers.
– Ray Anderson, CEO of Interface, world’s largest commercial carpet manufacturer. (The Corporation, 2004)
It is also important to remember that many corporations want to integrate ethical practices and are making it a part of their company culture. They understand that the long term benefits of corporate ethical behaviour, far exceed the short-term thinking that is part and parcel of exploitation. Anderson, who is quoted above, created a task force to examine how to incorporate a CSR program after it became clear that it was important to consumers.
The benefits of Corporate Social Responsibility
People who work for companies with CSR programs are generally happier, and more productive. Employees, and people in general, often want to feel that they are contributing to a greater cause that goes beyond buffering the bottom line. A CSR program fulfils that human need.
Putting Corporate Social Responsibility into practice
A company can support a cause by donating money, or by letting their employees give their time to an important cause. Many companies that go down this road fully integrate CSR into their company policies and ensure that it is at the forefront of everything they do. This is a smart practice for many reasons, including:
- Creating a healthier society and forcing other companies to live up to better practices to compete with you.
- Staff is more committed to a company that cares.
- Consumers are more likely to show brand loyalty, which is on the decline overall.
- Companies that practice CSR stand out among brands that don’t. The advantages of this cannot be overstated. Companies are competing among thousands of brand messages people see daily.
What is the best way to implement a CSR strategy?
Ask employees what they are passionate about and find out what causes are important to them personally. Employees become more plugged in and engaged when their voice is heard. Also, many people want to be inspired to give back to the community but don’t have the personal time to devote to a cause between work and family. Studies have found that people who give back to the community are healthier than those who don’t, so by implementing a CSR program you are creating a positive work environment overall.
Millennials, who seem to be a generation that puzzles marketers and business people alike, often cite Corporate Social Responsibility as one of the most important values a company can have. Click To Tweet This generation will quit a job and start their own company just to incorporate CSR practices. That’s a big deal!
Millennials want to change the world around them and therefore choose social impact as their top reason for starting a business.
– Ali Faagba, 2018
The advantages of adding a CSR program to a company cannot be overstated. It is a long term strategy that benefits everyone on both a local and global scale. People who step outside their own needs to help others are often healthier, and happier. It also builds momentum towards a better future for generations to come.
The Corporation – A Film by Mark Achbar, Jennifer Abbott, and Joel Bakan, 2004
Ali, Faagba, ‘Small Businesses That Consider Social Impact Will See One Their Bottom Line’, 2018
Lain Hensley, ‘Corporate Social Responsibility Done Right: 5 Ways to Help Your Company Shine’, 2014
Source: Anna, Johansson, ‘Corporate Social Responsibility Can Actually Be a Competitive Advantage, So where’s Your CSR Program?’, 2018