Creating shared value: the case for CSR
23 April 2018 | By Cause4 staff
by Addison Peers-Johnson
Corporate Social Responsibility (CSR) is getting paid a lot of lip-service. So much lip-service, in fact, that companies are even finding it necessary to specify in their marketing materials that their CSR policy isn’t simply a ‘box-ticking’ exercise.
Mark Goyder’s report for Tomorrow’s Company, for example, describes this common kind of approach as a “fashion parade where companies would win applause...for saying the right things in their reports”, but where these “right things” mean little to companies themselves.
There is at least some impression in the corporate world that CSR is something they need to write about just for the purpose of ticking that box. Socially responsible? - check.
But this impression doesn’t mean that strong and diligently-implemented CSR policies aren’t a great way for companies to differentiate themselves and create sustainable profits for their stakeholders. Here’s why:
1. It helps build profitable relationships
Tomorrow’s Company argues that the most important business benefit for companies revolves around the relationships that CSR fosters. Mark Goyder explains how successful companies need to embed the values of their leaders in the habits and norms of the organisation as a whole. This creates an environment where a shared set of values and a clear purpose engenders trust and loyalty between all involved. This trust and loyalty, in turn, allows for the creation of strong relationships with employees, customers, suppliers and communities.
This idea is essentially about company culture – something so important for the younger generation that according to YourCause, 75% of millennials would take a pay cut to work for a responsible company. This is evidence of one of many beneficial relationships that emerge when businesses have strong core values.
2. Employees add more value to the business when they are engaged in community work
Statistics show that the most productive work is done by people who feel themselves to be a part of a bigger picture, and who take ownership of their efforts in manifesting the aims of the company.
Employees like being involved in meaningful work outside of work - seen at Mercedes-Benz Vans, where employees in 2017 were offered unlimited time-spend on charitable work after a company survey found 87% of them wanted to spend more time and money on charitable efforts.
Many other businesses dedicate paid days every year to volunteering and are rewarded with stronger teams and more motivated employees as a result. YourCause’s research found that employee productivity is boosted by 13% on average when staff are engaged in CSR efforts – indicative of the fact that engagement boosts efficiency.
3. People want to be involved with companies that are socially responsible
It is fundamentally within the interests of companies to have the community on-side. This works both for customers and employees.
Li Huaizhen, President of China Minsheng Investment Corp., writes that when companies engage with communities:
“[the community] will welcome your projects and provide huge support. So, a company’s own interest and the social value it provides are closely connected. In fact, this is also a kind of investment, and it always brings returns.”
Social enterprise Give as you Live’s research into the relationship between consumer attitudes and their purchasing behaviour, found that 86% of Britons said that supporting charity would give one retailer the edge over one that does not. Furthermore, YourCause found that staff turnover goes down by 50% when employees are engaged in CSR programmes. These facts illustrate the idea that customer and employee relations are improved by CSR programmes.
This tells us that effectively engaging in good causes can be a legitimate business tool, and that it is a valid way to differentiate from the competition – both in terms of winning customers and retaining productive staff.
Strong CSR shouldn’t be perceived as an obligation from social pressure. It should be seen for what it really is: an element of responsible business strategies that have the potential to improve the wellbeing of a company’s bottom-line – and the communities in which they play a fundamental part.
For those in the charity sector, it is important to take up and spread the rational and economic case for strong CSR. With it, communities can prosper.
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