Does CSR Equate to Good Business?

Corporate responsibility, CSR, corporate citizenship, corporate conscience, corporate philanthropy, employee engagement, sustainability – these buzzwords routinely can be found in social media channels and even the metrics-driven business pages of mainstream media.

But what do they really mean? And what does all that corporate sowing in the world of corporate responsibility actually reap, if anything?

What do we mean?

Most of the above-referenced buzzwords are trying to get at the same idea – companies are responsible for their actions as they relate to all stakeholders – consumers, customers, employees, investors, the communities in which they operate, and the environment.

And most companies – rightfully – take pride in demonstrating that they are acting responsibly on as many levels as possible.

To avoid debates over the lexicon, let’s stick to the broadest of the terms for the rest of this blog – Corporate Social Responsibility, or CSR for short. What is CSR?

For me, pictures always help. The CSR Spectrum, below, not only defines what CSR is, but it also shows what CSR has been. The very idea of what CSR entails continues to evolve.

CSR Spectrum

Follow the diagram left to right … step back in time and walk forward. It used to be that companies understood CSR programs as an employee benefit – special events, United Way campaigns, and company matching of higher ed donations. The largest companies might have a foundation that handed out grants. As programs matured and corporate interest in CSR grew, companies became very interested in more robust workplace giving programs.

As these evolved and companies began thinking about other stakeholders, CSR turned to cause marketing in order to align product and brand with responsibility. As we focused on the employee as a CSR stakeholder, employee engagement took hold.

Why the changes? Because companies – all of us in the industry, really – began to realize that the corporate “practice” of “being responsible” could be applied in newer and better ways … to more and more stakeholders. Not long ago, we added the environment to that list of stakeholders and voila, corporate sustainability programs took shape.Corporate Sustainability and Good Done GreatTo be a good corporate citizen today, for example, means that your company focuses not just on giving and volunteering in the community, but also on business ethics, environmental sustainability, and employee work-life balance.

As CSR evolved, it also became more metric-driven. Companies needed the numbers to back up the many great stories about all they things they were doing beyond just earning a profit for their shareholders or paying a fair wage to their employees.

And – as the CSR Spectrum diagram suggests – the more our CSR programs evolved, the greater the reach, the greater impact they would have.

What do we reap?

So now you might be thinking: greater impact? … really? … like what?

Turns out, Winston Churchill was onto something when he once famously declared:

“We make a living by what we get. We make a life by what we give.”

Churchill said that long before “Corporate Social Responsibility” was ever on anybody’s list of buzzwords!

More importantly, Churchill was right. Corporate America benefits in ways large and small by giving of itself – its money, its people, its time, and its resources.

How?

Performance – We all understand that business is about making money – for its shareholders and employees alike. We are learning, however, that companies that give of their time/money/resources actually do better in the long run. CECP reports, for example that companies that increased their giving since 2010 have seen an increase in profitability and performance.

Morale – When it comes to employee morale, surveys and polls continue to reach the same conclusion – people regularly report a desire to be part of a company that places a premium on being socially responsible. Consider business ethics, an important component of today’s CSR. According to leading ethics and compliance firm LRN, the perception of a company’s business ethics impacts recruitment and retention. 

Image with the consumer – Socially responsible companies are more desirable to consumers than their counterparts, particularly with regard to younger, more socially-focused individuals. Indeed, companies that give back to their communities and charities enjoy something called a “benevolent halo effect.”

Socially Responsible CompaniesAtmosphere – Companies that give are also inclined to recruit and hire employees with the “it’s up to me” mindset, creating a kind of reciprocating engine of philanthropy and citizenship. Anecdotes and studies alike confirm that those who give are generally more successful than those who don’t, and many companies are using social media and other instruments to identify such candidates ahead of their less philanthropic counterparts.

Sustainability – We believe that sustainability is going to dominate CSR culture, discussions and metrics for years to come. Why? Because sustainability is more than just an environmental topic that we learned about in school years ago. Sustainability is encompassing and impactful to all aspects of our lives. The idea of sustainability is not new to the plant and facilities management folks. Figuring out how to build more widgets with less energy, water and resources is an ever present challenge that has the good fortune of both improving the corporate bottom line AND the world in which we live. So “go sustainability”.

Good Done Great Sustainability

But today, sustainability means much more, especially in the CSR world. Even small business publications target their audience with important lessons about sustainability. Businesses need to pay attention, because sustainability affects product design and life cycle, trade, government regulation and more. What’s more, few CSR programs are more interesting to employees today than those that marry employee engagement initiatives with sustainability opportunities.

The bottom line

Corporate Social Responsibility is far more than a fad or buzzword. Evidence abounds that companies that give more, do more, care more – these are the companies that indeed reap a richer harvest.

As companies nurture this evolving, more impactful culture of responsibility, that “it’s up to me” mindset of the employee turns into an “it’s up to us” mindset for the company … and that is surely a catalyst for more and greater success.

 

Good Done Great Featured in UK-based Sustainable Business Magazine

Good Done Great was featured in the UK-based, Sustainable Business Magazine. Read our article which highlights the importance of employee participation in green initiatives as a way to increase engagement, recruitment, and retention.