4 Benefits of Having a Corporate Social Responsibility Strategy
Business leaders are responding to calls from employees, consumers and policymakers alike to make corporate social responsibility (CSR) a core part of their organization.
Fortune Global 500 firms are now spending more than $15 billion a year on corporate philanthropy, according to a 2016 report entitled CEO Materialism and Corporate Social Responsibility. This finding tallies with the 2016 PwC Global CEO survey, which revealed how 64 percent of CEOs have made CSR a central part of their business rather than a stand-alone program.
Where once CSR was considered something of an afterthought, it is now a fundamental strategic priority for businesses. For example, pharma business Alvogen has ensured that its global CSR program “Better Planet” builds on the company’s mission of “making people’s lives better by addressing important social issues and making high-quality medicines more accessible around the world.”
Tying its purpose to its CSR has allowed Alvogen to provide more than 10,000 hours of hands-on service since it launched its Better Planet program in 2011—raising more than U.S. $1 million for charity in that time.
Robert Wessman, Alvogen’s chairman and CEO, says, "Social responsibility is something that is a part of our mission statement as a company and very much a part of how we think and who we are."
There’s good reason to believe that a CSR program can help any business. Here are four ways organizations can expect to benefit:
1. Helps create a strong community to thrive in.
It’s impossible to build a thriving business in a community environment which is struggling. Talent will be in short supply, demand will be lacking and resources will be scarce. Therefore, it’s in your interests to do your bit to create a strong community.
At Alvogen–which has commercial operations in 35 countries–there is a commitment to giving something back to the communities in which it operates by providing regular support in a number of different ways. For example, once a year, it holds the “Alvogen Day of Service,” where its employees dedicate their time to helping their local communities.
2. Helps cut down costs.
By committing to reducing packaging and using recycled materials, as part of your CSR, you can reduce your costs while doing your bit for the environment. There are many ways in which businesses can reduce their environmental impact and promote sustainability which have a positive impact on their bottom line. By replacing fluorescent or incandescent lighting in your building with energy-efficient LED lighting, you are saving both energy and money.
3. Creates a positive brand image.
Consumers now place a high importance on CSR–they don’t want to just know that companies are doing it, they want to see exactly the work they are doing to impact society in a positive way.
Studies show that CSR affects consumers’ buying decisions, especially the younger demographic. More than nine-in-10 millennials would switch brands to one associated with a cause, according to findings from the 2015 Cone Communications Millennial CSR Study.
How brands then relay to their customers how they are driving change is also very important; stories need to be delivered in an authentic and unique way, without the usual marketing slant.
Alvogen, for example, has created a microsite for its CSR efforts to allow it to put the focus on “the change” rather than the business.
4. Encourages employee buy-in.
It’s not only consumers who want to align with companies that share the same beliefs and values as them. Employees do, too.
The Cone study shows that 64 percent of employees want their employers to support the issues and causes that matter to them–three-quarters of which want to actively participate in helping improve their companies CSR practices. A strong CSR program encourages employee buy-in to your company and your brand, and drives them to build the best company that they can build.
Ultimately, a business can grow with or without a commitment to CSR. But it’s fast becoming an expectation from both consumers and employees that companies should be recognizing their social and environmental responsibility. There are signs that both groups are now prepared to vote with their feet and wallets against those organizations who fail to show their commitment to CSR.