Corporate social responsibility (CSR) is a business model concept that allows a company to be socially accountable to itself, its stakeholders, its customers, and the entire public.
In addition to creating strong loyalty ties and boosting morale between employees and corporations and helping employees and employers feel connected to a larger purpose, research has shown that companies with effective corporate social responsibility programs and initiatives are more profitable than those that aren’t.
Maxine Attong, author and executive coach, says that by engaging in CSR, companies can differentiate themselves from their competitors while also making ethically beneficial decisions for society. She says, “CSR initiatives allow companies to stand out from the rest by showing their commitment or interest in a cause, a community, or a particular segment of the population that they want to serve. The belief is that companies can create a ripple effect that brings about wider change, by positively impacting one part of the [social or physical] environment. This is a way of ‘giving back’ to the community or a way of giving voice or visibility to an underserved part of the population.”
To better understand the concept, here are the different types of corporate social responsibility, why corporate social responsibility is valuable, three companies that have implemented successful CSR initiatives, and why CSR matters for women employees and job seekers.
Types of corporate social responsibility
Corporate social responsibility is a broad concept that can take on various forms depending on the size of a business and its budget. Understandably, it’s easier for larger, more established corporations to implement wide scale programs, but smaller businesses can still initiate programs on a more lowkey level by donating to local organizations and charities, sponsoring local events, and more.
Here are four common types of CSR and examples of each:
Environmental: Examples might include shrinking the environmental footprint by installing renewable energy sources, reducing pollution and greenhouse gas emissions, minimizing unnecessary plastic packaging, or prioritizing recycling programs.
Human rights: Examples might include eliminating unethical labor practices like child labor and slavery, ensuring healthy and safe working conditions, committing to diversity, equity, and inclusion in the workplace, and ensuring fair pay.
Philanthropic: Examples might include donating to and volunteering at nonprofit groups, offering job-training programs for marginalized communities, funding educational programs, or supporting community health initiatives.
Economic: Examples might include improving business operations through sustainable practices and manufacturing processes designed to minimize unnecessary waste and emphasize production impacts over profit.
The value of corporate social responsibility
Implementing CSR programs is integral to creating a positive brand and retaining customer loyalty. (It’s also the right thing to do.) Although they’re an important part of corporate public relations, Attong says that CSR initiatives fail when companies only pay homage to the public relations aspect and aren’t concerned with the long-term effects of their initiatives. She says, “Some see CSR as a tick in the box and a way of looking good. The challenge for these initiatives is for them to have a long lasting and positive impact.”
In order to create a successful CSR program, it’s imperative for companies to understand how their business impacts their customers and the world around them, develop CSR programs that make their employees proud, and continue to measure ROI on their programs and optimize for growth.
Here are four ways that corporate social responsibility adds value to the workplace:
1. Stronger corporate brand and reputation
CSR adds value to businesses by establishing a positive corporate brand and reputation among employees, consumers, and stakeholders. Roughly 88 percent of business executives believe that large companies have a special responsibility to make the world a better place. Plus, a 2019 survey of millennials found that climate change and environmental protection are among the group’s top social concerns, meaning that corporate responsibility is an expectation of most workers, investors, and consumers today, so they’ll likely have a more positive view of companies that deliver in those areas.
2. Increased customer loyalty and sales
Customer loyalty is important to every company, as it’s directly correlated with sales. Reports have found that 77 percent of consumers would be more willing to purchase a company’s products or services if the company demonstrated a commitment to addressing social, economic, and environmental issues—and 73 percent of investors agree. Plus, 56 percent of consumers said they’re more likely to buy from a brand that is known for its social value, and 53 percent identify a brand’s commitment to community involvement as a leading driver to purchase.
3. Operational cost savings
CSR programs that invest in operational efficiencies result in major savings in addition to a reduction in their impact on the environment. For example, after a company-wide training on sustainability, Walmart started a seemingly simple initiative to remove all lightbulbs from its vending machines since they stay on 24/7, which ended up saving the company $1 million annually in energy bills. Similarly, Patagonia realized that if their customers kept their clothing in use for just nine additional months, the company could reduce their carbon, waste, and water footprint by 20 to 30 percent. The realization led to the development of their Common Threads Initiative, which promises that they'll “make great stuff, fix it when it breaks, and recycle it when you’re done with it,” saving them money and helping the environment.
4. Retention of top talent
Employees will usually stay at their jobs longer and feel more committed to their employers if they know they’re working for a business that practices social responsibility. For example, a Deloitte survey found that when brands demonstrate humanity, employees are 2.6 times more likely to feel motivated at work. Additionally, CSR programs have the potential to reduce staff turnover rate by up to 50 percent, and 75 percent of millennials say they would take a pay cut in order to work for a socially responsible company.
3 companies with successful CSR initiatives
Ben & Jerry’s has been committed to behaving in a socially responsible manner since its conception in 1978. The ice cream giant’s mantra is “business has a responsibility to the community and environment,” and they’ve implemented a range of corporate social responsibility initiatives over the years that have spoken to that mantra, including awarding grants, enacting fair trade business standards, and reducing their environmental footprint.
The certified B Corp practices transparency and holds themselves accountable through yearly SEAR Reports that showcase their three-year plan, activism campaigns, social equity performance, and environmental performance. Since 1985, the Ben & Jerry’s Foundation has funded 7.5 percent of its annual pre-tax profits to community organizations involving racial justice and climate change across the country, amounting to $1.8 million annually.
Apparel workers, who are predominantly women, are among the lowest-paid employees worldwide and often suffer from unsafe working conditions, long hours, and discrimination. Since its foundation in 1973, outdoor apparel company Patagonia has tried to reverse these trends by donating $185 million to nonprofit environmental and conservation groups and investing an additional $38 million in socially responsible companies.
Currently, 82 percent of their clothing line is Fair Trade Certified sewn, which supports over 72,000 employees who participate in the Fair Trade Certification program. Another cool feature from the company? FootPrint Chronicles, their interactive map that gives a detailed description of each textile mill, factory, and farm location.
Starbucks’ motto is that they can have a positive impact on the world—one person, one cup, and one neighborhood at a time. Their social responsibility strategy is based on three pillars: community, ethical sourcing, and the environment. In addition to using only ethically sourced ingredients, the Starbucks Foundation offers neighborhood grants, disaster relief, and youth training opportunities. Through the foundation, they’ve also partnered with the Malala Fund to promote girls’ education and increase leadership opportunities for young women in coffee and tea growing communities throughout India and Latin America.
For the environment, they’ve pledged to both donate 100 million disease-resistant coffee trees by 2025 to help farming communities and reduce their landfill waste by 50 percent by 2030. The company has also committed to diversifying its workforce, with hopes to hire 25,000 veterans by 2025 and hire 10,000 refugees by 2022.
Why CSR matters to women employees and Gen Z job seekers
Because diversity is often a popular aspect of social responsibility, it comes as no surprise that CSR is incredibly important for women employees and job seekers who value equality in the workplace. It’s no secret that women face myriad barriers in the workplace (think occupational sorting, the gender pay gap, sexual harassment, motherhood discrimination, ageism, etc.), and CSR can play an integral role in promoting gender equality and offering disadvantaged or marginalized women more educational and career-related opportunities.
And while employees of all genders should care about corporate social responsibility, data from the Center for Creative Leadership has found that women feel a stronger commitment to their organizations than men as a result of their organization’s CSR initiatives. Plus, research shows that more women leaders at work is correlated with higher levels of philanthropy. And since women already make teams more profitable and innovative, having more women in leadership can benefit both companies and society as a whole. AKA, promote more women.
Attong adds that CSR is becoming more important for Gen Z, the newest entrants to the workplace. She says, “More so than millennials, [Gen Z is] concerned about equity and social rights. Having grown up in the digital age, they value connectivity and make little distinction between the persons they communicate with online as it relates to ethnicity or gender or any other distinguishing factor. As COVID-19 has laid bare the inequities of the world, this group's concerns about equity have grown. They expect companies to take a stand, and they are concerned about the truth and not just the surface value of things. They will call out companies for saying one thing and doing another.”
About our source
Maxine Attong is an author, an executive coach, and a Gestalt Organizational Development Consultant. She uses her 20-plus years of organizational excellence to assist leaders navigate and bring positive change to the different levels of systems—individual (self), teams, and the larger organization—that they operate within.