Corporate Social responsibility (CSR) is an effort by companies to create a positive impact on society. It is a responsibility of an organization to contribute to the betterment of society. It can either be done through charity, voluntary initiatives or any other way the company adopts. The goal of CSR should be to make society a better place. CSR also benefits you in your business but the objective should be to keep society on priority and not the business profit. A few examples of big companies that are engaged in CSR are Starbucks, Lego, Microsoft, and Adidas.
The ‘triple line bottom’ is a concept on which most businesses started acting on. It means that the focus is not just only on monetary benefit but it aims toward the 3 P’s i.e., “People, Planet and Profits”. There are four categories of Corporate Social Responsibility:
Companies are committing to their environmental responsibilities and making themselves environment friendly. Reducing carbon emissions, recycling waste and using alternative energy are a few ways companies can fulfil their responsibility toward the environment. Planting trees are also a great way to work for this cause.
By philanthropic responsibility, it means that the company is giving back to society from its share. Charity or dedicating a portion of the earnings to a particular cause, companies help the society on a national or international level. This portion can be according to the company’s size and revenue. These donations are for noble causes such as disaster aid, Humanitarian rights, and educational programmes.
Economic responsibility ensures that the company has set standards of moral regulations. It means the end goal of the company is not just to make more money but also to keep other aspects in mind. When a company compensates each and every employee with a fair and equal pay salary, it falls under economic responsibility.
Ethical responsibility refers to the fair and impartial operation of an organization. It is an ethical responsibility of an organization to treat every employee equally without any discrimination on the basis of gender, race or colour. Ensuring minimum wage, a healthy work environment, and ethically sourced materials companies fulfil its requirements of ethical responsibility.
Business in today’s time becomes highly competitive, and to make your business unique and stand apart from the crowd, CSR is a highly efficient way. It can make your brand visible to customers and investors. 55% of customers are even willing to pay more if the company has great CSR. It helps the company to create a positive brand image for the customers and investors.
THINGS TO REMEMBER
- Build your CSR strategy around your company’s core values. If CSR is in alignment and focused on the company’s value, it would make a better impact.
- Making a reasonable work environment wellbeing and security program will assist you with laying out solid frameworks to safeguard your employees and avert any mishaps and injuries.
- If your company is engaged in CSR then it is important for you to ensure that your company is not harming the environment by any means. Avoid electricity, water or any other type of wastage.
- Get the certification and recognition for your CSR projects from B-corp certification. It will ensure the validity, accountability and transparency of the standards. It will also give the acknowledgement for your efforts.
IMPORTANCE OF CSR
Betterment of Society
Companies engaging in CSR aim toward the betterment of society. The initiative that the company takes helps the local communities to fight poverty, illness or any other obstacle. Companies are usually seen doing charity events to fund the social initiatives carried out by them.
CSR Improves The Brand Image
A brand that brings social change through its practice, values and credence gains more recognition in the market. Customers prefer to buy from a brand that is associated with some sort of social initiative and concern. The study shows that 90% of the consumers are switching to brands that contribute to a good cause. CSR helps your business in raising brand awareness. A perfect example of the same is Tata Group in India. Tata Group along with its products is also known for its social work. CSR creates goodwill and trust for the company.
Helps In Retaining Employees
It is essential for an organization to retain its employees and reduce the attrition rate; it will help them save money that is spent on the hiring and training of new employees. CSR also helps companies to engage their employees.
The study in Deloitte’s survey 2021 shows that 70% of candidates are looking for a company that works with a social purpose. For employees, it is important to work with a firm that promotes purpose-driven CSR. Employees appreciate working with an organization that has a positive public image. It can also minimize employee turnover by 50%.
The social cause initiated by your company attracts many. It is more attractive for investors to invest in an organization that embraces CSR activities. The company that shows its serious commitment to CSR activities, implies that the company is interested in making a long-term and healthy relationship with the customers and investors. Investors believe that companies that engage in corporate social responsibility are less likely to commit fraud and hence it provides assurance.
The most trusted way to acknowledge your Corporate social responsibility is to undergo a third party social impact assessment. It can help you achieve recognition for your work. There are various means through which you can get recognition. For example, B-corp certification, ISEAL code compliance, and SASB standards. These certifications are provided only by thorough verification and review. Accomplishing CSR Accreditation is an apparent declaration of your greatness in Social Responsibility.
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