In today’s society, corporate social responsibility (CSR) is no longer a nice-to-have; it’s a need-to-have.
CSR comes in many forms. Businesses, little or large, are expected to lead the way in creating a progressive CSR program that gives back to people and our planet and one that continuously shifts depending on the current social and economic climate. Yet, initiating a CSR program can be tricky to do. Winning executive buy-in, assigning responsibilities, and finding the right CSR software are some of the biggest hurdles to jump—that’s before you’ve even locked down your initiative.
We’re aiming to help you jump those CSR hurdles with this article. We’ll explore some of the benefits a corporate social responsibility program can bring to a business to help you win key stakeholder buy-in and celebrate some of the companies paving the way.
First, let’s take a quick glance at the major benefits of CSR we’ll be covering shortly.
What are the benefits of CSR?
CSR increases employee engagement
CSR improves bottom-line financials
CSR supports local and global communities
Contributes to the United Nations’ 17 Sustainable Development Goals
Increases investment opportunities
Presents press opportunities
Increases customer retention and loyalty
CSR improves employer branding
8 Key Benefits of corporate social responsibility for business
CSR increases employee engagement
Extensive research proves that CSR and a strong sense of employee purpose actively contribute to increased employee engagement. Employee engagement is not just a KPI to measure CSR effectiveness; it’s a positive metric to further other business performance statistics.
Engaged employees have a 17% increase in productivity, are 21% more profitable, and can have 41% lower absenteeism. Innovation also increases in an engaged workplace. Translating this into financials, disengaged employees cost businesses between $450 and $550 billion annually.
Giving back to the community is a virtuous circle in which engaged employees are enriched by volunteering opportunities that further engage and encourage them. Corporate philanthropy engages entire organizations, from marketing executives to operations leaders.
CSR improves bottom-line financials
When you’re trying to win buy-in from leadership for your CSR program, it often falls to financials. Stakeholders want to know if this project will see a positive ROI. While some numbers are a little long-winded to get to, digital CSR and sustainable initiatives have positively affected business bottom-line.
CSR supports local and global communities
For all of the fantastic benefits your business gets from showcasing your CSR initiatives, it can be easy to overlook its reason for being in the first place. CSR gives people the leverage and the platform they need to make a difference in local and global communities.
Companies are often collections of like-minded, talented people working towards a broader vision. If you can find a CSR program that’s in line with the company’s values, then your business truly has the opportunity to create a substantial positive impact.
TOMS is a fantastic example of how a product-led CSR initiative can support global communities.
The TOMS CSR initiative drives their company mission and is at the forefront of their product. The shoe brand has positively impacted close to 100 million lives globally, committed $6.5 million to impact grants, and provided over 700k weeks of safe water. Now imagine the impact we’ll see if more major brands followed suit.
Contributes to the United Nations’ 17 Sustainable Development Goals
Building off our last point and often a great reference for businesses struggling to pick a CSR route to go down. You have the power to take your CSR initiatives global and work toward answering one—or more—of the UN’s sustainable development goals.
By creating a CSR push towards answering one of these goals, you’ll be joining part of the global “to-do list for people and planet.”— UN Secretary-General Ban Ki-moon. It’s important your company look to create social impact by limiting its environmental impacts.
Increases investment opportunities
Today, global sustainable investment is now over $30 trillion worldwide—up 68% since 2014 and 10x since 2004. At the beginning of 2020, BlackRock Chairman and CEO Larry Fink echoed this in his letter to CEOs, arguing that climate change has become a defining factor in corporations’ long-term prospects. The letter explains how the $7 trillion investment firm will shift toward sustainable investing, putting it on par with financial returns.
“While governments must lead the way in this transition, companies and investors also have a meaningful role to play.”— BlackRock chairman and CEO Larry Fink
With recent notable investments like Marshall Wace targeting $1 billion for a brand new green hedge fund that aims to trade shares based on ecological and moral qualities— investment opportunities are making giant leaps toward conscious change.
Presents press opportunities
Impactful CSR can get excellent press. If your organization is ever struggling to gain online popularity and press interest, your CSR initiative could be your route to market. Creating a CSR program that gets you noticed will see a fantastic boost in your brand awareness and overall online brand affinity.
However, be cautious about the why behind your CSR efforts. CSR that’s not authentic has been called greenwashing; if your CSR initiative seems too out of line with your mission and values, people can question its purpose, even though it comes with good intent.
Research has shown that employee beliefs behind CSR initiatives can impact workplace attitudes, trust in top management, organization pride, job satisfaction, and even performance. Your employees are your biggest brand ambassadors— lead with authenticity, and authentic press opportunities will soon follow.
Increases customer retention and loyalty
Excellent CSR gives a company a chance to showcase consistency and win loyalty, which ultimately converts into customer retention and increased sales. It dates back to Cialdini’s six principles of persuasion and proves to be a fantastic way for businesses to showcase they’re trustworthy.
Research shows that 87% of Americans are more likely to buy a product from a company that they can align their values with, and over half of all consumers are willing to pay extra for a product if they’re buying from a company with a sturdy CSR strategy.
Have faith in your CSR initiative, and ensure they align with your customers’ values. In doing so, your customers will place their trust in your business and remain loyal to your shared mission.
CSR improves employer branding
Last on our list, but certainly not least, is the employer branding benefits that good CSR initiatives can generate.
It can be a struggle to attract and retain talent. Still, research has shown that 82% of Gen Z workers consider CSR a significant factor when deciding on their next employer, and 66% would consider a pay cut if it meant working for a more socially responsible company.
However, it doesn’t stop at the younger generations. LinkedIn found that 75% of candidates research a company’s online reputation before applying for a role. Plus, CR Magazine found that 75% of Americans would not take a job with a company with a poor corporate responsibility reputation.
Need more convincing? 92% of all employees would consider leaving their role if presented with an offer by a company with an excellent corporate reputation.
Don’t underestimate the benefits of a good CSR initiative can do for your recruitment and staff retention strategies. Since we’ve covered some of the benefits of a corporate social respobsibility initiative, let’s dive into a few brands doing it best.
The BlackLivesMatter campaign highlighted the injustices black-founded business owners face every day. Just 1% of black women receive funding for their ventures as opposed to 77% of their white counterparts. Shocking numbers like these saw industry giants like Google react with CSR initiatives— and applauded for it.
In 2020, Google announced startup accelerators for black-female-led businesses and invested $175 million toward economic opportunity for black business owners, founders, and job seekers.
Google’s commitment to racial equality has landed them some excellent press coverage from the likes of The Verge, HypeBeast, and The Washington Post, to name a few. Overall, this has supported their corporate responsibility and employer brand reputation, helping them win more qualified applicants in the future.
Johnson & Johnson – The skill-sharing CSR initiative winning employee engagement
In Switzerland, Johnson & Johnson’s employee engagement program, Talent for Good, saw eight skill-sharing missions across four NGOs implemented with Alaya.
This effort to do good has resulted in huge interest from their Swiss team, a constant stream of applications, and positive feedback. It’s also helped employees develop their professional skills— doubling down the benefit for employees and nonprofits.
Lego – The global impact CSR initiative winning loyalty
Ranked as the world’s most reputable company in 2020 by Reptrak, the children’s building blocks business continues to go from strength to strength. The Lego Group is the perfect example of how you can turn any business model into a purpose-driven, sustainable-orientated business.
The business focuses on three core areas; children, the environment, and people, and they are continually finding innovative ways to give back to and support the growth of these areas.
“Every day, employees at the LEGO Group are empowered to make decisions to do what’s right for children, our fans, our partners, the environment, and our local communities.”— Niels B. Christiansen, CEO.
Their mission to do what’s right for the planet and limit their contribution to environmental change has not only landed them the number one as the world’s most reputable company but has won them substantial customer loyalty. 57% of consumers say they would buy from The Lego Company— this result is over 13% higher than other top-ranking reputable companies.
Wrapping up the benefits of CSR
As we’ve explored, there are so many benefits a strong CSR initiative can bring to businesses. It largely depends on business goals and growth strategies—these determine what a CSR plan will look like for a brand.
We’ll close with a reminder to implement your CSR initiatives with authenticity and in alignment with your broader mission and vision. In doing so, you’ll win press sure, engagement—great, but more importantly, you’ll win hearts by doing good—one act at a time.
What are 8 main benefits of corporate social responsibility (CSR)?
- Increases employee engagement
- Improves bottom-line financials
- Supports local and global communities
- Contributes to the United Nations
- Increases investment opportunities
- Presents press opportunities
- Increases customer retention and loyalty
- Improves employer branding
What are some examples of CSR?
Some fantastic examples of companies with great CSR programs are:
Google’s BLM initiative
Johnson & Johnson’s skill-sharing program
Lego’s environmentally friendly initiative
These companies have all aligned their mission and vision with their CSR initiative and are genuinely doing a great job.
