Gone are the days when businesses can do whatever they like and consumers will keep buying. With the rise of social media, corporations and businesses that abuse the environment, their workers or society at large are being called out and held accountable for their actions. Enter corporate social responsibility.
Consumers today aren’t just looking for products or services at the lowest prices or highest quality. Many want to know that their money is being used in a responsible manner and to address social or environmental issues that matter to them….and companies are listening! Corporate social responsibility has become an integral element in many businesses, not only in response to public demand but to benefit from free advertising at the same time.
What is corporate social responsibility?
Corporate social responsibility falls into a few broad categories – environmental, philanthropy, ethical labor practices and volunteering.
Environmental corporate social responsibility might mean taking extra measures to reduce the business’s carbon footprint or utilizing products that are environmentally sustainable. It can mean harnessing green energy sources or drawing on eco-friendly business practices in the office.
Some businesses are using philanthropy as a means of corporate social responsibility – donating some of their profits to charities or NGOs. While others participate in volunteer programs, offering the time of their CEOs or staff to support particular issues and organizations.
Consumers also want to know that a company’s workers are being treated fairly and ethically. This can refer to those that are working in their own backyard or abroad where labor laws are not stringent or always upheld.
Why does corporate social responsibility matter?
With the impacts of global warming becoming more and more visible and the disparity between the world’s rich and poor ever expanding, the need for a different way to do business has never been more pressing. People are realizing that we can’t afford to continue plundering the earth’s resources at the rate we have been just to make a profit and there has to be a more sustainable alternative to doing business.
Consumers are now demanding transparency from businesses and with the buying power in the hands of tech-savvy millennials, corporate social responsibility can have a huge impact. Buyers want to know that their money isn’t just going into revenue for the business but is having broader benefits for society and the environment.
Social media as a catalyst for corporate social responsibility
Social media enables each and every individual to spread the word about sustainable and responsible business practices and highlight the negative impacts corporations may have on the environment or society. With a few “shares” of good or bad news stories, the impacts on corporations can be drastic, either leading to a plummet in sales or offering free advertising to boost their business.
As people become more educated about what’s going on in the world and their ability to share it with others is at the touch of a screen, “armchair activism” has soared. Rather than spending millions on advertising campaigns for TV or billboards, companies can now get free marketing through a good news story about their social or environmental deeds.
Many corporations that are making waves today are those that are willing to share their success with others and understand that sustainability is important for not only people and the planet but their long-term success. In addition to enticing clients through their social actions, businesses that practice corporate social responsibility are also attracting some of the world’s top talent who want to work for a company that is contributing towards the greater good.
One headlining scandal or environmental accident can ruin a company and corporate social responsibility is a valuable way of reducing the risk of such incidents occurring and mitigating negative press. It’s also a way of building customer loyalty based on ethical values and differentiating companies from one another. If your main competitor is practicing and marketing social responsibility, their positive actions are likely to draw some of your clients away.
The social responsibility of one corporation can also transform the wider industry in positive ways. One example is the rise of Whole Foods, with many believing that their promotion of local agriculture and improved animal treatment has had far-reaching benefits, with consumers willing to pay a slightly higher price for it. Companies like Microsoft actively promote corporate social responsibility and the role that the broader tech industry can play in spreading economic opportunity throughout the world.
Concerns regarding corporate social responsibility
One of the biggest concerns regarding corporate social responsibility is the motives of the company, with some using their CSR programs to distract consumers from core operations that may not be conducted ethically. It’s important for consumers to be wary of actions that may appear altruistic on first glance, but actually have ulterior motives.
This also raises concerns about the hypocrisy of a company implementing CSR programs to improve their reputation. Some believe that corporate social responsibility is just a means for businesses to justify their position of power, with costs pushed onto consumers, rather than being absorbed by the corporation’s profits.
Corporate social responsibility and the future of business
Whether companies choose to implement corporate social responsibility actions for their own benefit or the greater good of the world, there’s no doubt that it’s becoming more and more popular. There’s a new triple bottom line – people, planet and profit – with companies encouraged to put profits into programs that give back and will ultimately result in more revenue in the long run.
But consumers are becoming more aware of dishonest actions and when decisions regarding corporate social responsibility are made behind closed doors and without transparency, they will start to question if there are strings attached. It’s important that companies enable their socially conscious customers to have a voice in how and where they want to see change and that they practice what they preach, whether it’s through the actions of their employees, management or CEO.
Big corporations have more power than they think and can make a huge impact in solving significant social issues if they put their mind to it. It’s proven to be a win-win situation for many companies around the globe who are utilizing their power and profits for worthy purposes.