Corporate social responsibility (CSR) is a type of business self-regulation with the aim of being socially accountable. There is no one “right” way companies can practice CSR; many corporate CSR initiatives strive to positively contribute to the public, the economy, or the environment. In today’s socially conscious environment, employees and customers place a premium on working for and spending their money with businesses that prioritize CSR.
Katie Schmidt, the founder and lead designer of Passion Lilie, said that companies that implement CSR stand to benefit in multiple ways.
“What the public thinks of your company is critical to its success,” Schmidt told Business News Daily. “By building a positive image that you believe in, you can make a name for your company as being socially conscious.”
As the use of corporate responsibility expands, it is becoming increasingly important to have a socially conscious image. Consumers, employees, and stakeholders prioritize CSR when choosing a brand or company, and they are holding corporations accountable for effecting social change with their business beliefs, practices, and profits.
“A robust CSR program is an opportunity for companies to demonstrate their good corporate citizenship … and protect the company from outsized risk by looking at the whole social and environmental sphere that surrounds the company,” said Jen Boynton, CEO of B Targeted Marketing Co.
To illustrate how critical social responsibility has become, previous research by Cone Communications found that more than 60% of Americans hope businesses will drive social and environmental change in the absence of government regulation. Nearly 90% of the consumers surveyed said they would purchase a product because a company supported an issue they care about. More importantly, nearly 75% said they would refuse to buy from a company if they learned the company supported an issue contrary to their own beliefs.
Consumers aren’t the only ones drawn to businesses that give back. Susan Cooney, head of global diversity, equity, and inclusion at Symantec, said that a company’s sustainability strategy is a big factor in where today’s top talent chooses to work.
“The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet, and revenue,” said Cooney. “Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back.”
Schmidt also stated that sustainable development can help a business financially. For example, using less packaging and less energy can reduce production costs.
4 types of corporate responsibility your business can practice
Recognizing how important socially responsible efforts are to their customers, employees, and stakeholders, many companies focus on a few broad CSR categories, including:
Environmental efforts: One primary focus of CSR is the environment. Businesses, regardless of size, have large carbon footprints. Any steps a company can take to reduce its footprint is considered good for both the company and society.
Philanthropy: Businesses can practice social responsibility by donating money, products, or services to social causes and nonprofits. Larger companies tend to have plentiful resources that can benefit charities and local community programs; however, as a small business, your efforts can make a big difference. If there is a specific charity or program you have in mind, reach out to the organization and ask them about their specific needs and whether a donation of money, time, or perhaps your company’s products would best help them.
Ethical labor practices: By treating employees fairly and ethically, companies can demonstrate CSR. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.
Volunteering: Participating in local causes or volunteering your time (and your staff’s time) in community events says a lot about a company’s sincerity. By doing good deeds without expecting anything in return, companies can express their concern (and support) for specific issues and social causes.
Building a socially responsible business
While startups and small companies don’t have the deep financial pockets that enterprises have, their efforts can have a significant impact, especially in their local communities.
“Even 5%, though it might not sound like a lot, can add up to make a difference,” said Schmidt. “When thinking of ways to donate and give back, start local, and then move from there.”
When identifying and launching a CSR initiative, involve your employees in the decision-making process. Create an internal team to spearhead the efforts and identify organizations or causes that may be somewhat related to the business or that employees feel strongly about. Contributing to something your employees are passionate about can increase engagement and success. Involving your employees in the decision-making process can also bring clarity and assurance to your team.
“If decisions [about CSR] are made behind closed doors, people will wonder if there are strings attached and if the donations are really going where they say,” Cooney said. “Engage your employees [and consumers] in giving back. Let them feel like they have a voice.”
Regardless of which strategies you use for sustainable development, Boynton said it is important to be vocal. Let your consumers know what you are doing to be socially conscious.
“Consumers deserve to share in the good feelings associated with doing the right thing, and many surveys have found that consumers are inclined to purchase a sustainable product over a conventional alternative,” she said. “Announcing these benefits is a win-win from both a commercial and sustainability perspective.”
What to avoid when creating a socially responsible business model
Becoming a socially responsible business can be simple, though there are a few caveats.
First, businesses should avoid participating in charitable efforts that are not related to their core business focus or that violate a company’s ethical standards in any way. Instead of blindly sending money to a completely unrelated organization, find a nonprofit that your company believes in or a project in your community.
Second, don’t use CSR opportunities solely for marketing purposes. Schmidt said running a corporate responsibility campaign as a quick marketing scheme can backfire if your business doesn’t follow through. Instead of employing a one-time act, you can adopt socially responsible business practices over time. Schmidt said employees and consumers react positively to companies that embrace long-term social responsibility.
Last, if you are considering sustainable activities that aren’t legally required yet, don’t wait. By adopting socially responsible norms early on, you set the bar for your industry and refine your process.
Undertaking CSR initiatives is a win for everyone involved. The impact of your actions will not only appeal to socially conscious consumers and employees but can also make a real difference in the world.
Examples of CSR companies
If you’re looking for CSR inspiration for your business, here are six companies practicing corporate social responsibility on a large scale.
Lego: The toy company has invested millions of dollars into addressing climate change and reducing waste. Lego’s environmentally conscious efforts include reduced packaging, using sustainable materials, and investing in alternative energy.
TOMS: TOMS donates one-third of its net profits to various charities that support physical and mental health as well as educational opportunities. As of April 1, 2020, the brand is directing all charitable donations to the TOMS COVID-19 Global Giving Fund.
Johnson & Johnson: The brand focuses on reducing its environmental impact by investing in various alternative energy sources. Globally, Johnson & Johnson also works to provide clean, safe water to communities.
Starbucks: The global coffee chain has implemented a socially responsible hiring process to diversify their workforce. Their efforts are focused on hiring more veterans, young people looking to start their careers, and refugees.
Google: Google has demonstrated its commitment to the environment by investing in renewable energy sources and sustainable offices. The company’s CEO, Sundar Pichai, is also known to stand up against social issues such as discrimination.
Pfizer: The pharmaceutical company’s focus on “corporate citizenship” is reflected in its healthcare initiatives. Some of the company’s initiatives include spreading awareness about non-infectious diseases and providing accessible health services to women and children in need.
No matter the size of your company, implementing socially responsible practices can not only benefit your business, but it can make a positive impact on the world.
Additional reporting and writing by Nicole Fallon and Sammi Caramela. Some source interviews were conducted for a previous version of this article.
Social responsibility is now a key part of any successful entrepreneurial venture.
Being socially conscious is not only a responsibility all entrepreneurs have, but it also helps build a lasting relationship with your community. Moreover, consumers don’t only expect companies to provide great products and services anymore, but also to help the community in which they operate.
Besides the moral factor, socially conscious companies often create positive work environments and have dynamic ideologies that attract top talent. The best prospects are likely to choose a company that has an active role in their community and that dedicates some of its resources to helping others.
Although the benefits of having a socially conscious business are clear, it’s hard to know where to start, especially for a startup. I’ve put together an article to help you on your quest to establishing social consciousness and making it a part of your brand’s identity.
1. Establish a social mission.
The best and most forward way to make your business socially conscious is to create a social mission. All companies have mission and vision statements, but you should incorporate a third one that emphasizes how your company will actively seek to help the community.
Don’t fall into the trap of creating a vague social mission; it’ll be hard to explain to your team, and chances are you won’t be able to build a strategy around it. Instead, look at the resources you can allocate to helping the community right now and write a realistic mission that focuses on promoting teamwork and transparency. Keep the mission simple, such as “Do Good Stuff.”
2. Establish realistic goals.
After you have set up your mission, you should start thinking about what you are going to do and exactly how your company will help. Create a list of goals that you want to achieve in the next three to six months. Remember to set up realistic objectives that can be accomplished without causing major disruptions to your day-to-day operations.
Include both short-term and long-term goals that can be measured. These goals should:
Address an immediate issue within your community
Provide solutions with the resources you already have
Educate or create awareness of an issue in your area
3. Educate your employees.
You will need the help of your entire team if you want to truly create a socially responsible business. Therefore, your employees need to be involved and informed every step of the way. They need to understand the issues your company is addressing, why you’re doing it, and exactly how. You can answer their questions by carrying out meetings and sending out informative memos. This will help them answer any customer inquiries and motivate them to join the cause.
4. Organize an in-house social responsibility team.
Once you have educated your employees, you can set up an in-house social responsibility team. These employees can dedicate some of their time to crowdsourcing ideas to figure out the best way to have a more positive impact in the community. Your in-house social responsibility team should also:
Be passionate about helping others
Create and carry out an actionable list of tasks
Work with the resources you allocated
Launch internal and public awareness campaigns
Report to you about the performance of the social responsibility strategy
5. Direct contributions.
You can show social responsibility through philanthropy. Donating money or resources to local charities can make a huge difference to their daily operations, having a direct impact on the community in which your business apart. Most startups and small companies are limited as to how much money they can donate. You can always go the extra mile and set up a donation box or organize a small fundraising event to show support.
6. Encourage volunteering.
Volunteering makes a world of difference, so reward your employees who decide to enroll and volunteer in social programs. Moreover, you should scope out charitable events that need daytime volunteers and offer your team’s assistance. Volunteering as a team will help your employees build a strong bond while contributing to a good cause. Besides having a volunteering day, you can also reward those who want to volunteer during work hours. You can allow them to take paid time off to volunteer on specific dates, granted they finish all their tasks beforehand.
7. Ethical labor practices.
When you think about social responsibility, the first things to come to mind are donations and volunteering. However, social consciousness starts from within. Make sure you follow ethical labor practices, for instance:
Treat your employees with respect and dignity
Value their work
Enable growth opportunities within your company
Provide fair compensation for their services
Create a safe and healthy work environment
8. Think about sustainability.
Even if they don’t seem like an immediate concern in your particular community, environmental issues are already an alarming reality for most. Capitalist economies have spearheaded the charge of unsustainable practices, so it’s every entrepreneur’s responsibility to take action and start reducing their environmental impact.
Make sure you focus on sustainability and keep it in mind throughout your company’s entire operations. This includes:
Working a paperless environment, whenever possible
Participating in recycling programs
Implementing eco-friendly lighting and plumbing
Creating energy-efficient policies
Encouraging carpooling, a great place for listening to inspirational audio books.
Discouraging any unsustainable practices and industry standards
9. Collaborate with compatible organizations.
Collaborating with other companies and organizations that have a similar mentality can help you have a bigger impact than you would on your own. Joining other local, and sometimes national companies for a cause can help you make a super-charged donation or organize an amazing fundraiser. Partnering up with another organization can help you get more funding and it can help you find creative ways to allocate other resources into charitable work.
10. Make your effort last.
It’s important to understand that social consciousness is not a marketing stunt or a one-time attempt. You need to take social responsibility seriously and treat it for what it is: an ongoing effort to help a good cause in your community. Always try to contribute on a regular basis, host an annual event, and make scheduled contributions to a good cause. Organize yourself properly and set realistic expectations to make sure you can continuously help your community.
Social responsibility is now a key part of any successful entrepreneurial venture. Remember to show gratitude towards your community and your employees to cultivate good relationships. In doing so, you will create a successful business with a high moral standing that is a valued member of society.
What’s your opinion of your Human Resources department? Paper pusher? Only there when you need help with benefits and birthdays? Wait… Does our company have a Human Resources department? Let’s face it… it’s not always the team that everyone wants to join—or even worse—the team you want to partner with to hire your team. Human Resources has an image problem. But here at the Jack Welch Management Institute, we help HR leaders navigate past this negative perception and position themselves with not only a seat at the table but as an independent confidant to the CEO.
Without a doubt, the head of HR should be the second most important person in any organization. From the point of view of the CEO, the director of HR should be at least equal to the CFO —Jack Welch
But now as an HR professional can you do that? How do you earn a seat at the table? How can you earn the respect of the C-suite? We recently hosted a webinar in partnership with SHRM (Society for Human Resource Management) to discuss just that. Mary Carr, JWMI’s Dean of Curriculum and Content shared the five keys steps HR professionals can take to evolve their HR role to a position of primacy within any organization.
5 Steps to Earning a Seat at the Table
BE SEEN AS THE TALENT MANAGEMENT EXPERT! Benefits, payroll, and other administrative tasks are essential. But there is no more important goal than hiring the right person for the job. And not just any person—you want to hire the best and brightest! HR professionals need to redefine themselves as talent management experts. You need to be the go-to partner that will help other departments build and develop their teams. Make talent your number one priority. You need to be the go-to resource that has a plan, understands where talent gaps are, speaks to other operators about their needs within the business, understands the hiring market, and has the foresight to look ahead at what’s coming and plan for that. Lastly, ensure you have the right measures in place to assess and reward talent.
At JWMI, we believe in differentiation. Reward the stars (the top 20%) both financially and with additional responsibility, work to coach and grow the middle 70%, and speak candidly with the bottom 10% to understand if the position is a good fit for them. Retaining top talent and developing future leaders is key to any organization’s success. Putting a process in place like differentiation ensures that everyone from the CEO to the manager to the employee understands where they stand within the larger organization.
“Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.” —Jack Welch
SHARPEN YOUR BUSINESS ACUMEN AND ALIGN YOUR ACTIONS WITH THE COMPANY’S STRATEGY. Often HR professionals are not seen as “part” of the business nor included within strategy sessions. To change this perception, you need to demonstrate your business acumen. Show that you understand how the company makes money, how each area of the business contributes to organizational success, and the competitive advantage that building an organization filled with A-level players brings. Speak the language of the business, not HR rhetoric. Share your point of view candidly in meetings; don’t just sit there, afraid to speak up.
TURN YOUR DEPARTMENT FROM A COST CENTER INTO A PROFIT CENTER. HR professionals need to be able to “speak with numbers.” Deliver a clear and definable ROI for the HR department using quantifiable metrics to demonstrate efficacy. How engaged is the work-force? How has the talent you’ve hired performed and driven value for the company? If your company is currently using metrics to track HR activities and programs- great! If you aren’t tracking and measuring, this should be an immediate action item. If you aren’t comfortable with numbers, take a course. Better yet, cross-train in an operational department to gain insight. And become friendly with your finance peers who will be a valuable resource. Finally, understand the real costs of turnover when factoring in expenses for hiring, onboarding, and training. Know how you measure your top talent and what the pay norms are for that skillset caliber.
COMMUNICATE CLEARLY AND CONCISELY. It’s not easy to get the ear of the CEO or other C-suite executives, a lack of executive presence can undermine even the most capable HR professional. The critical component of an effective executive presence is often overlooked in today’s fast-paced business world. At JWMI, our MBA students take an Executive Presence course which teaches the communication tactics often reserved for the C-suite. We stress how to write an effective memo, how to put together a compelling PowerPoint, and most importantly how to present yourself via WebEx or an in-person meeting. Outside of getting your MBA, you should ask for communication feedback from those around you, practice presentations in the mirror, and find a role model who you can emulate behavior from within your organization and who can help you grow.
BUILD TRUST, BECOME A VALUED ADVISOR. HR, perhaps more than any other business function, can help develop a culture of truth, transparency, and candor in the organization. To start, survey employees, listen to their issues, and work to fix those problems. Bring energy and optimism to the job every day and deliver bad news quickly so people can respond to it and take action. Candor doesn’t develop naturally; it takes continued practice. Everyone can improve, so being both open to receiving feedback as well as giving it, will slowly help build the foundation for trust. It may take years, but once the workforce sees HR as a trusted partner in their endeavors as well as a valued advisor to senior executives you know you are on the right track., HR needs to balance being both a parent and pastor. Our MBA with Human Resources concentration curriculum helps to do just that.
Start implementing these five steps into your organization and you will be on your way to gaining a seat at the table.
About the Jack Welch Management Institute
Our new MBA concentration in Human Resources, built on Jack Welch’s time-test business principles, aims to position the CHRO (Chief Human Resource Officer) as a top position in the company, second behind the CEO. Because HR professionals should earn a seat at the table—as they help to set their company up for success.