8 minute read
Corporate Social Responsibility. It seems like everyone is doing it, or says they are.
CSR feels good, sure, but does it actually have a business benefit, other than dressing up a couple of pages of the annual report? Let’s take a look.
Sometimes called sustainability, CSR is the idea that corporations, like people, are active members of society and therefore have the same obligations under the social contract: that in order to reap the benefits of citizenship, they have a correlative obligation to contribute to the good of the community.
CSR looks and feels different across all organizations. Some companies simply give money, or match employees’ charitable donations. Others take a creative approach, such as offering employees financial incentives to ycle to work, or helping customers recycle their products. Any actions that enhance the wellbeing of the community can be described as CSR.
Does it work, though? Read on as we explore some of ways CSR can build -and damage- your brand.
Brand and product perceptions
It’s a competitive world out there. Digital advancements have dramatically lowered the cost of entry to many industries, and businesses are having to fight harder than ever for their share of consumer spend.
CSR can have a surprising impact on how your customers perceive not only your business, but your products and services. A study from the Kellogg School of Management identified a phenomenon that the authors labelled the “benevolent halo” effect. When customers know a company has done social good, such as making a significant donation to a charity, not only does their opinion of the company itself improve, but they also perceive that company’s products to perform better and be of higher quality.
This builds on survey data that has been replicated in multiple studies worldwide, which show that consumers consistently indicate a preference for purchasing from companies that engage in activities to improve society. A recent UK study showed this figure to be as high as 88%.
A penny saved
Not only can CSR benefit a company’s external reputation, doing good can also make a positive impact on the company’s bottom line.
For example, General Mills set out to reduce its energy consumption by 20 percent. At one plant alone, when energy monitoring devices were installed on operating equipment, the company saved over $600,000.
Other businesses have saved substantial portions of their budget through initiatives such as allocating printing costs to departmental budgets rather than central cost centres (watch printer use plummet!), installing sensor lights, or allocating waste-free floors in buildings to encourage employees to reuse and recycle, that also reduce waste management costs.
Tapping in to talent
So CSR seems to do good things for an organization’s reputation, its product perception and its bottom line. Does it have any impact on human performance?
Simply put, yes.
A recent study published in the Harvard Business Review revealed that when an organization understands its higher purpose, and communicates how people’s roles contribute to this, that employees “will try new things, move into deep learning, take risks, and make surprising contributions,” including increasing innovative thinking.
We’ll talk more about the relationship between CSR and purpose further on, but there are some other things you should know about how CSR can help to attract, engage and retain your talent.
A white paper from Mandrake has shown:
• 80% of respondents would prefer working for a company that has a good reputation for environmental responsibility.
• Working for an organization whose employees positively view corporate responsibility efforts has a significant, favourable impact on how they rate their pride in the organization, their overall satisfaction, their willingness to recommend it as a place to work and their intention to stay.
• When employees have a favourable view of their employer’s social responsibility, they have more positive attitudes in other areas that correlate with better performance, such as customer service and leadership.
• CSR is the third most important driver of employee engagement overall, and an organization’s reputation for social responsibility is an important driver for both engagement and retention.
Talking about CSR
So, now you’re convinced that CSR is not just a moral imperative, but also good for business, how do you talk about it to your people and customers, without triggering cynicism?
Find your purpose
All organizations have a purpose. As Quinn and Thakor note in HBR , this isn’t something to be invented, it already exists, and can be discovered by thinking empathetically about how your organization helps people.
Here are some examples:
Google: To organise the world’s information and make it universally accessible and useful
Unilever: Making sustainable living commonplace
Wholefoods: With great courage, integrity and love, we embrace our responsibility to co-create a world where each of us, our communities and our planet can flourish.
A purpose is more than just making or doing something for profit. It’s a reason for being. Once you know your purpose, it’s easier to understand how your CSR efforts align with who you are as an organization; which makes it easier to talk about why you’re doing good, without it sounding hollow.
Authenticity = reputation
A purpose, and the good you do associated with that, have to be real. When an organization’s people and customers don’t believe that there’s a genuine intent to make a difference, CSR communication can damage your brand, rather than enhance it.
Think of an oil company who, after a major spill, starts talking about its donations to an environmental charity, rather than talking about fixing the practices that caused the spill in the first place. Greenwashing has no place in genuine CSR, and doesn’t benefit anyone.
As Shannon Schuyler, Sustainability partner at PWC notes, “Today, if you’re inconsistent, you’re toast. You’ve got to stand for something, and you have to make sure that your behaviours and your values guide you.”
A company that has a clear purpose and a CSR approach that’s authentic and supports its values, is given a license by its people and customers to talk to them about the good it does.
Be real, and realistic
CSR isn’t going to solve all the world’s problems. It’s more about a values-based contract between a society and the people and businesses that exist within it, to create a framework for the sort of world we want to be.
So when talking about CSR efforts, internally and externally, it’s important to be real about your intent, and realistic about what can be achieved.
Integrating your CSR messages with wider communications about purpose, products, services helps to build a story around your organization that adds significant value. And measuring your impact is a great way to demonstrate that you are making a difference, without resorting to wild claims that impact authenticity.
Giving doesn’t have to be selfless
There’s a school of thought that when the giver benefits from giving, it devalues the gift. We strongly disagree with this, and here’s why.
Human beings (and the corporations they run) are inherently self-interested. It’s just how we’re wired. So if we can help people to see the benefit to them in giving to others, they’ll be more likely to contribute to their communities. Our experience managing change has taught us that understanding and harnessing human behaviour is the best way to get results, so it’s important to be clear about what motivates us and to work with that.
Here at AlphaJuliet, we’ve led CSR communication strategies for major global firms, and we’ve helped not-for-profits build engagement by communicating authentically with their people.
We do this because our purpose is to help our clients build relationships that create happiness and get results.
What’s your purpose?
If you need help finding or communicating it, please get in touch. We’d love to help.