What does CSR Mean and Why is it Important?
December 16, 2019
Community-and-environmentally-conscious practices are fast-becoming key drivers of growth and expansion across industries. In this information age, companies can no longer keep their social affairs separated from their corporate ambitions, as customers are now more apt to probe their activities and ethical behaviours.
Corporate Social Responsibility (or CSR) refers to an operational framework that enshrines ethics and sustainability. It typically incorporates elements such as charity team building events, employee gifting packages, designated employment slots for host communities, promotion of human rights, eco-friendly initiatives, etc. With these practices, companies operate with a keen consideration of social and environmental ramifications.
The pressure to take up socially-oriented responsibilities continues to mount for companies across the board, but so also are the rewards. It’s becoming more important for companies to resolve social, cultural, and environmental challenges with their lines of products and services. But many companies are still holding out on a weak CSR standing, peddling questions like “is it worth taking up CSR?” “How do we determine the best CSR initiatives for our company?” and “How do we measure the impact of a CSR initiative on the environment and the business as well?”
In this dossier, we present the most important reasons why CSR should become a priority for your business.
Enhancing Brand Awareness
Businesses often mark themselves apart from competitors by side-stepping profits for socially-driven causes. Also, in an information age that allows customers to easily dig up info on any company, it’s critical to maintain a warm, caring public presence. For instance, an easy-going charity team building event like helping out in a charitable kitchen can help win over and keep new health-conscious customers.
In the information age, news of a company’s exemplary social projects spreads fast and boosts reputation. It’s not like you’ll go on every social media channel and announce the impact of your CSR activities. But it’s powerful enough that anyone digging up info on your brand will instantly come across your CSR news.
Cutting Down Costs
Several amazing projects designed to help forward eco-friendly and community-focused causes have given rise to ingenious innovations. Also, several emerging cost-saving practices in many industries have been born out of sustainability and conservation initiatives. For instance, we’re seeing companies cutting back on production costs and reducing waste by minimising packaging.
In fact, the goal of cutting costs alone can help get board members to quickly sign up for a CSR initiative. In several instances, such initiatives have helped companies cut back on hundreds of thousands of dollars worth of costs in a year.
Research projects that can help your business cut back on the use of energy, materials, etc. These can help give your business a greater competitive edge while also boosting your good standing with consumers.
Promoting Customer Engagement
Increased customer engagement comes with huge benefits. Your customers will be more proud to identify with your brand the more you make efforts to address social and environmental problems. With an enhanced reputation, your brand will quickly grow in authority and your recommendations and ads will become more impactful.
In fact, as your customers become increasingly inclined towards your brand, more opportunities open up for you to explore. You’ll be able to interact on a much deeper level and elicit more profitable information from them. Businesses struggling to cut out a recognisable figure in their space will find this benefit of CRS highly critical.
Enhanced Employee Engagement
Employees are customers themselves, and they also tend to behave like most other customers with regards to their business preferences. Most employees are more committed to companies with social and environmentally conscious operational frameworks.
Companies can use CSR programs to elicit more commitment from their employees. For instance, a simple charity team-building event like building makeshift homes for the homeless can help thaw relationships and foster bonds between team members. In other instances, companies dole out employee gifting programs which in turn help employees increase their gifting to charity.
And with enhanced engagement, communication flow becomes more efficient and team members are able to obtain the right information they need to take action.
Overall, this can help companies make significant savings from the costs of failure due to poor communication between team members and leaders.
Attracting and Retaining Millennial Pool of Talents Consumers
The millennial population is fast becoming the largest demographic of consumers. With their relatively higher tech proficiencies, millennials are much more inclined than any other market segment to do a background check on a company before buying into it. To remain attractive with this sprawling demographic of consumers, companies need to maintain a vibrant and admirable CSR profile.
As millennials have a greater propensity to uphold ethics and universal values, they’re much more predisposed to boycott brands that use exploitative labor and other unethical practices. This predisposition is also a result of the fact that millennials will most likely live through an age where climate change and some social issues will take a greater toll on the planet. Millennials are at the forefront of sustainability and community-driven programs because they and their children will be the most impacted by these issues.
And as the increasingly predominant workforce demographic, millennial employees also push companies from within towards greater social consciousness. In fact, millennials are the major advocates of CSR initiatives in companies. According to a recent Deloitte survey, 70% reported a company’s social and environmental policies as a key determinant of their decision to work there. As such, companies looking to win over the best talents from this largest segment of the workforce need to maintain a socially responsible narrative.
CSR programs don’t need to solve every problem in a community pro-bono. The aim is to look beyond immediate profits to chip away at various problems, while also creating value and wealth for the owners of the businesses. CSR projects like charity team building events can help put smiles on many faces, including on stakeholders, shareholders, employees, customers, community members at large. CSR is also one of the most crucial ways to promote a good brand image and also cut costs to enhance your competitive edge in the digital age.
Beyond the Boardrooms recent CSR impact
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