Corporate Social Responsibility, or CSR, is one of the most important factors in establishing your company’s public image and reputation. In recent years, CSR has become somewhat of a buzzword, as corporate relationships with non-profit efforts have become increasingly important in the public eye. So why is CSR so important? What is it? What does it mean for your business? We have all the details you need and more.
(Image via: www.nktphotonics.com)
What is Corporate Social Responsibility?
According to the World Business Council for Sustainable Development, CSR is “the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families, as well as of the community and society at large.” CSR, in its essence, looks beyond profits and instead focuses on how business can benefit the greater community.
Some of the best-known examples of businesses embracing CSR are Apple, Google and The Walt Disney Company. Just in the last decade, CSR has become “mainstream” as corporate businesses become more aligned with nonprofit organizations.
(The Top 10 brands in the 2016 Global RepTrak 100 report via www.reputationinstitute.com)
Why Does it Matter?
A recent study from Reputation Institute, a private global consulting firm, found that 42% of how people feel about a company is based on their perceptions of the firm’s CSR. That means nearly half of your company’s reputation is based on the public’s feelings about what your business is doing to support the community.
Furthermore, companies that have a good reputation based on their CSR initiatives have noticeably stronger stakeholder support. Businesses that are given a CSR Reputation Score of 80+ (or excellent) have more customers who are more likely to buy products, recommend the company, say something positive about the company, work for the company and invest in the company.
Knowing all of this, it is clear that having a well-established CSR program is essential for businesses that want to improve their public image.
Don’t Limit Yourself
When developing a CSR program, don’t limit yourself in choosing what sort of programs you’ll align your business with. There are a few broad categories of social responsibility that businesses are practicing these days, to include: environment, philanthropy and ethical labor practices. But within those categories, and even outside of them, the options are basically endless. Some companies, like Tom’s Shoes, created their own program in which a pair of shoes is donated for every pair sold. On the other hand, Starbucks created its C.A.F.E. Practices guidelines, which are designed to ensure that the company’s sources grow and process coffee by evaluating the economic, social and environment aspects of coffee production.
Invest in Yourself
Beyond CSR, investing in your company’s reputation can have a major impact on your business. Reputation Institute found that companies that invest in a strong reputation have the following results:
- Better performance than the overall market
- Better stock price recovery after the 2008 financial crisis
- Increased influence on policy making and policy makers
- Better access to acquisitions
- Increased recommendations
- Improved employee talent
- Higher employee engagement and alignment
Knowing what we do about CSR and how important your company’s public reputation is to the success of your business, it’s simply not an option to choose not to develop or engage in a CSR program.