Corporations at present are facing the challenge of sustaining in the era of extensive globalization. The world is now getting more interconnected so the business world is putting more effort into improving their public relations and paying more attention to establish themselves as a good corporate citizen. Current global issues like climate change, food insecurity, war and conflict, health, and education have a terrible impact on the corporations’ ability to benefit and grow. Therefore Companies are adopting CSR policies to see how they can play a role in resolving these challenges. What is Corporate Social Responsibility (CSR).
Corporate social responsibility means to have the awareness that you and your company has an obligation and certain responsibilities towards the society at large and not just towards the company itself. CSR is about doing business while taking the social and environmental impacts of its operations into account. CSR is about implementing strategies to deliver on these social expectations in a way that generates positive benefits for the society and environment and the company gains financial or reputational value for the business itself.
Forbes has published a report based on a newly conducted study on Reputation and Corporate Social Responsibility by Reputation Institute. This research suggested that CSR has a strong and appealing effect when it comes to the business case. Across the 15 largest markets in the world, 73% of regular consumers are willing to recommend companies to their known circles that are perceived to be socially involved and responsible. In reality, only 5% of companies are delivering on the social promises. This suggests that the majority of companies and businesses are still ignorant about CSR policies and its implementation which is no less ruining a golden opportunity for the growth of the business.
Previously there was a lack of strong evidence to prove that CSR and sustainability strategies can generate more revenues for the company. It can add both reputational and financial value to the company. It wasn’t surprising that investors hesitated a lot to make investments in a CSR and Sustainability initiatives. But the corporate scenario at present has changed a lot. The corporate world is now more attentive to gain the trust and loyalty of like-minded clients and customers so they are focusing on CSR policies to generate potential growth in revenue.
CSR has proved to improve employee productivity, reduce operational costs through environmental efficiencies and measurably reduce key CSR-related risks to revenue and reputation.4Front Consulting, a specialist CSR and Sustainability consultancy has suggested that Companies incorporating CSR policies in their business strategies have performed better on 3 out of 4 financial measures than those without it and have generated over 18% higher profits.
Gallup Inc, an American research-based, consulting company reported in 2013 that 49% of employees are more likely to stay with an employer who encourages charitable giving.57% of employees want their company to take more CSR initiatives. 63% of employees believe that committing to charitable organization significantly increases their engagement at work. Companies which have more engaged and dedicated employees perform better financially, with productivity increasing on average by 18% and operating margins up by 27%.
By incorporating CSR policies businesses can take social initiatives for the betterment of the community such as launching education programs and homeless care activities. Employee volunteering is also included in community benefits. CSR programs will enable businesses to contribute to the environmental benefits, through material recyclability, using more renewable resources at lesser costs, and create several new analysis tools, such as life-cycle assessment and eco-friendly products.
CSR has innumerable benefits for the company itself.These positive effects include increased sales, customer loyalty, and greater productivity, more ability to attract and keep skilled employees, get high profile investors to invest more capital and reduced regulatory oversight.
Businesses whether big or small have to deal with communities and its people. In today’s era, our consumers are very sensitive to social and environmental issues. To grow and hold a successful place in the corporate world; businesses have to become engaged actively with them on these issues.