Corporate social responsibility (CSR) refers to a company’s efforts to be socially responsible and to ensure that its business practices have a positive impact on the public. According to research conducted by the Governance & Accountability Institute (G&A), 85 percent of S&P 500 companies published corporate responsibility or sustainability reports in 2017. CSR has become an integral aspect of daily operations for many businesses.
To learn more, check out the infographic below created by the Washington State University’s Online MBA program.
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Chapter 1: Benefits and Barriers
Investors seek companies who consider and pursue opportunities to create a positive impact on the environment and society. Many businesses are overcoming barriers to implementing CSR strategies and reaping the benefits.
The 6 Benefits of CSR
CSR’s chief benefits carry positive corporate effects in numerous ways. For instance, engaging in CSR forces companies to stretch past their business models and produce innovative ideas that often directly benefit their bottom lines. It can also dramatically reduce energy use, which could yield cost savings. Thirdly, companies that implement partnership strategies involving entities like nonprofit organizations can help create brand awareness. Practicing CSR can also require a company to focus on sustainable growth, which can also tie into a focus on long-term success. Additionally, CSR can be an opportunity to connect with customers that are passionate about doing good for the environment and society. Finally, CSRs can provide employees the chance to enjoy seeing their work make an impact locally and globally.
Barriers to Implementing and Benefiting from CSR and Sustainability
There are a few roadblocks that may cause businesses to delay in implementing CSR strategies. Some of these roadblocks include analytical concerns such as incorrect or missing key performance indicators (KPIs) or a lack of sufficient data to implement initiatives. Others are connected to insufficient resources, like a lack of tools, skills, or dedicated human capital. There are also concerns regarding elements like a lack of performance incentives or a pressure to meet short-term earnings goals.
Chapter 2: How to Develop a Corporate Social Responsibility Strategy
Considering a CSR strategy is noble, but actually implementing one and making an impact takes much more work.
Steps to Develop a CSR Strategy
Coming up with an effective CSR strategy is something that can be done by compartmentalizing the process, breaking it down to smaller steps. The first step involves observing customer needs and preferences, as a CSR strategy should align with customers’ values, beliefs, and expectations of your business. Secondly, it’s important to consider your organization’s processes and capabilities, ensuring that the CSR strategy doesn’t place inordinate demands on your business. Next, it’s important to state your CSR strategy-related vision and goals with employees, partners, investors, and customers. It’s also important to identify KPIs and those responsible for leading CSR efforts through the creation of positions charged with leading CSR efforts. Additionally, it’s important to implement and closely track the strategy’s progress, making timely adjustments and company-wide practice and process integration to strive for long-term CSR growth. Finally, a company’s CSR initiatives should inspire passion within new and current employees, which can make it easier for them to get involved and engage.
Tips for CSR Success
There are several key actions you can do to successfully implement a CSR strategy. Staying focused on a specific area can help, as can sharing knowledge and skills and being cognizant of risks associated with CSR initiatives. It can also be key to engage C-suite executives so they can in turn inspire employees. Additionally, it can be important to engage in proactive prevention by being socially responsible instead of merely reacting to trending social issues. Partnering with nonprofits can also help companies connect to established CSRs instead of building one from scratch. Finally, it’s important for companies to create a clear timeline so they can strive toward a proper endgame.
Chapter 3: Who’s Doing it Right?
Companies of all sizes are succeeding in their CSR endeavors. Google and the Walt Disney Company particularly stand out for their contributions.
According to 2018’s Google Responsible Chain Report, “In 2017, Google matched 100% of the electricity consumption from our global operations with purchases of renewable energy from around the world.” Additionally, Google’s 2018 Environmental Report showed 91% of waste from global data center operations was diverted away from landfills, the company’s data centers use 50% less energy compared to a typical data center, and it decreased carbon intensity per unit of revenue by 87%. For these efforts, Reputation Institute ranked Google #1 for CSR efforts in 2018.
Walt Disney Company
According to the Walt Disney Company’s 2018 Corporate Social Responsibility Report, Disney VoluntEars provided more than 600,100 hours of volunteer service. It also reported that 42% of its employees were minorities, and that it donated $103.7 million in cash. For these efforts, Reputation Institute ranked the Walt Disney Company #2 for CSR efforts in 2018.
CSR isn’t just the responsibility of multibillion-dollar corporations. It’s the responsibility of businesses of all sizes, across all industries. The scale of a CSR strategy doesn’t have to be global. Once it’s implemented, the impact will be exponential.