Responsible business practices and a commitment to global social citizenship are needed to safeguard our shared future – and pave the way for a better world.
Some of the biggest issues facing our planet – including climate change, poverty, social inequality, food insecurity and human rights abuses – are ones that cannot be tackled without critical change within the world of business.
Businesses must play an integral part in shaping what happens next. From their environmental impact, to their work within local communities, to who’s involved in their decision making, any business model should be examined to identify where and how sustainability efforts could be supported.
What is corporate social responsibility?
Corporate social responsibility (CSR) is the idea that a business has a responsibility to the wider world. It’s a management concept whereby companies integrate social and environmental concerns in both their business operations and their interactions with stakeholders, offering a way for companies to achieve a balance of environmental, philanthropic, ethical and economic practices.
The triple bottom line (TBL) is the idea that businesses should prepare three distinct bottom-line measurements, also known as the three Ps: people, planet and profit. The TBL highlights the relationship between business and a ‘green mindset’; it attempts to align organisations with the goal of sustainable development, and positive impact, on a global scale. Ultimately, it offers a more rounded, comprehensive set of working objectives than simply profit-above-all.
CSR issues are wide ranging. They include environmental management, human rights, eco-efficiency, responsible sourcing and production, diversity and inclusion, labour standards and working conditions, social equity, stakeholder engagement, employee and community relations, governance, and anti-corruption policies.
Why is CSR important to businesses?
According to Impact, a leading social value measurement platform, CSR is good for business. They note that:
- 77% of consumers are more likely to use companies that are committed to making the world a better place
- 49% of consumers assume that companies who don’t speak on social issues don’t care
- 25% of consumers and 22% of investors cite a “zero tolerance” policy toward companies that embrace questionable ethical practices
- Consumers are four times as likely to purchase from a brand with a strong purpose
- 66% of global consumers are willing to pay more for sustainable goods
On top of this, it’s estimated that CSR initiatives can help companies to avoid losses of roughly 7%. More and more businesses are publishing annual sustainability reports, in a bid for transparency in their efforts and operations and to benefit from its other advantages.
CSR is integral to the development of a more sustainable future. The better question for stakeholders wondering whether they can afford to spend time and energy implementing CSR strategies, is whether they can afford not to.
How can a business demonstrate CSR?
The United Nations Global Compact calls upon organisations to “align their strategies and operations with universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals”.
In addition to supporting businesses to aim for the prescribed United Nations Sustainable Development Goals, it asks them to adhere to ten Principles. The Principles outline measures across each of the key areas listed above. Examples of the measures include: the effective abolition of forced, compulsory and child labour; initiatives to promote greater environmental responsibility; the elimination of discrimination in respect of employment and occupation; and working against corruption in all forms, including extortion and bribery. It offers a framework and starting point for the minimum businesses must do in order to operate responsibly.
Similarly, in 2010, the International Organization for Standardization (ISO) launched new guidance: the ISO 26000. Designed for businesses who are committed to operating in a socially responsible way, it helps organisations to translate social principles into effective actions and shares best practice. Increasingly, a company’s adherence to ISO 26000 is regarded as a commitment to both sustainability and its overall performance.
Where CSR should be implemented in a business strategy depends on where improvement is required. If a business is energy-intensive, could that energy come from renewable sources? Where there’s a lack of diversity and inclusivity among employees, could human resource policies be revised? Could a multinational team of frequent flyers reduce their travel or offset their emissions?
The need for authenticity
Underscoring any CSR efforts is the need for authenticity.
In today’s world, the most respected brands don’t rely on virtue signalling – they live and breathe their values. A brand that is consistent in its actions is more likely to gain loyal followers and cultivate long-term corporate sustainability.
Modern consumers, particularly Millennials and Gen Z, are advocates for positive change. They demand more from brands and companies, increasingly wise to those whose claims ring false. One such example is prominent fast fashion brands who launch ‘sustainable’ or ‘recycled’ clothing lines while, behind the scenes, their predominantly female garment workers receive a less-than-living wage and suffer in deplorable working conditions. To use another example, many businesses also incorporate the rainbow flag in marketing efforts during Pride Month, while failing to support the LGBT+ community in any meaningful way.
Public relations activities fare better when brands are founded on an authentic, purposeful sustainability strategy.
The benefits of CSR
CSR programmes can be a powerful marketing tool. They can help a business to position itself favourably in the eyes of consumers, regulators and investors, boosting brand reputation. By commanding respect in the marketplace and gaining competitive advantage, CSR can result in better financial performance.
By default, business leaders who focus on improving their social impact will scrutinise business practices related to their value chain, consumer offerings, employee relations, and other operational aspects. This can result in new, innovative solutions which may also have cost-saving benefits. A business may reconfigure its manufacturing process to consume less energy and produce less waste; as well as being more environmentally friendly, it may also reduce its overheads.
CSR practices can boost employee engagement and satisfaction. Increasingly, people view their work as an extension of their own identities and convictions. When a brand invites them to share in its objectives, it can drive employee retention and attract quality candidates to roles.
Companies are embracing social responsibility due to moral convictions as well as profit – and reaping the benefits. All these effects of CSR can help to ensure that a company remains profitable and sustainable in the long term.
Champion CSR in your business sector
Are you passionate about environmental sustainability? Want to develop the skills and knowledge to pioneer global corporate citizenship? Interested in learning more about CSR activities?
The University of York’s online MSc International Business, Leadership and Management programme places particular emphasis on the challenges associated with global trade, marketing and sales, together with an overview of relevant management disciplines. You’ll be supported to build your knowledge of practice whilst developing an advanced theoretical understanding of the international business environment.