Compiled by Umulkulthum Kache Boniface.
Companies are increasingly ramping up their focus on social responsibility,whether they are championing women’s rights, protecting the environment, or attempting to obliterate poverty, on county, national, or global levels. From an optics perspective, socially responsible companies project more attractive images to both consumers and shareholders alike, which serves to positively affect their bottom lines.
What is corporate social responsibility?
Corporate social responsibility is a type of business self-regulation with the aim of social accountability and making a positive impact on society. Some ways that a company can embrace CSR include being environmentally friendly and ecoconscious; promoting equality, diversity, and inclusion in the workplace; treating employees with respect; giving back to the community; and ensuring business decisions are ethical.
CSR evolved from the voluntary choices of individual companies to mandatory regulations at regional,
national and international levels. However, many companies choose to go beyond the legal requirements and embed the idea of “doing good” into their business models. In today’s socially conscious environment, employees and customers place a premium on working for and spending their money on businesses that prioritize CSR. They can detect corporate hypocrisy.
To ensure CSR authenticity, a company should look at its values, business mission and core issues and determine which initiatives best align with the business’s goals and culture. The business can do this internally or hire a third party to conduct an assessment.
Why CSR is important
There are many reasons for a company to embrace CSR practices.
1. It improves customers’ perception of your brand.
It’s increasingly important for companies to have a socially conscious image. Consumers, employees, and
stakeholders prioritize CSR when choosing a brand or company, and they hold corporations accountable
for effecting social change with their beliefs, practices, and profits. To stand out among the competition, your company needs to prove to the public that it is a force for good. Advocating and raising awareness for socially important causes is an excellent way for your business to stay top-of-mind and increase brand value.
CSR practices play a crucial role in attracting new customers, whose purchasing decisions are strongly influenced by the company’s values, reputation, and social and environmental activism.
2.It attracts and retains employees.
Consumers aren’t the only ones drawn to businesses that give back. 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. Coming out of the COVID-19 pandemic, corporate revenue has been the main target for many businesses. However, I would encourage companies to put that increased profit into programs that give back.
According to Deloitte’s 2021 Millennial and Gen Z Survey, the modern workforce prioritizes culture,diversity, and high impact over financial benefits. An estimated 44% of millennials and 49% of Gen Zers rely on their personal ethics in determining the type of work and companies they would join. What’s more, employees that share the company’s values and can relate to its CSR initiatives are much more likely to stay.
3. CSR shows a sign of accountability to investors.
By demonstrating a developed CSR program and initiatives, your company is bound to become more appealing to both current and future investors. Investors play a growing role as key stakeholders in corporate social responsibility. Just like customers, investors are holding businesses accountable when it comes to social responsibility.
At the same time, a company that takes CSR seriously signals to both investors and partners that it’s interested in long term as well as short-term gain. CSR goes hand in hand with environmental, social, and governance (ESG) metrics that help external analysts quantify the company’s social efforts, and becomes a key factor for investors’ consideration and continued interest.
4. Community Support and Customer Loyalty
Social responsibility works as a platform for companies and consumers alike to make a positive impact
on local and global communities. Businesses that implement a social responsibility initiative that’s in line
with their values have the opportunity to increase customer retention and loyalty. Research shows consumers are more likely to buy a product from a company that advocates for an issue they care about. Community-oriented.
companies often enjoy a leg up on their competition as well, thanks to superior brand imaging. Forexample, Tesla Inc. (TSLA) CEO Elon Musk has successfully attracted environmentally minded consumers with his line of cutting-edge electric cars and green automotive products.
5. Increased creativity.
Another benefit of CSR initiatives is that they work as a way to encourage and restore lost motivation in employees. Through social involvement, workers are motivated to participate in company discussions and put forward any ideas, thoughts, and opinions they have. This input will be extremely useful for organizations when it comes to problem-solving and the creation of new products and internal processes.
Allowing employees, the freedom and support to speak up and offer new viewpoints allows them to feel a greater sense of belonging in their roles, and encourages them to find new and innovative ways to carry out their jobs.
You might not expect a CSR strategy to improve your bottom line because it typically requires investment in projects. However, as mentioned above, many customers are willing to pay more for products from a socially responsible brand, and CSR can help attract and retain employees. Given that turnover can cost companies thousands of shillings, this is worth noting.
6. CSR saves money.
You might not expect a CSR strategy to improve your bottom line because it typically requires investment in projects. However, as mentioned above, many customers are willing to pay more for products from a socially responsible brand, and CSR can help attract and retain employees. Given that turnover can cost companies thousands of shillings, this is worth noting. Types of corporate responsibility your business can practice In recognition of how important socially responsible efforts are to their customers, employees and stakeholders, many companies focus on four broad CSR categories.
i) Environmental efforts: One primary focus of CSR is the environment. Businesses have large carbon
footprints, regardless of size. Any steps a company can take to reduce its footprint is considered good for both the company and society.
ii) 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, even as a small business, your efforts can make a difference. If you have a specific charity or program in mind, reach out to the organization. This has been demonstrated by so many companies in the country like Base Titanium in Kwale County and Mombasa Cement in the Cement manufacturing industry.
iii)Ethical labor practices: Companies can demonstrate CSR by treating employees fairly and ethically. This
is especially true of businesses that operate in international locations with labor laws that differ from those in the country that the business is operating.
iv)Volunteering: Participating in local causes or volunteering your time (and your staff ’s time)tocommunity events says a lot about your company’s sincerity. When your company does good deeds without expecting anything in return, you express 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. 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 related to your business or that employees feel strongly about. You’ll increase engagement and success when you contribute to something that matters to your employees. Involving your employees in the decision making process can also bring clarity and assurance to your team.
If decisions are made behind closed doors, people will wonder if there are strings attached and if the donations are really going where they say. Whichever strategies you use for sustainable development, be vocal. Let your consumers know what you are doing to be socially conscious.
Socially responsible companies cultivate positive brand recognition, increase customer loyalty, and attract top tier employees. These elements are among the keys to achieving increased profitability and long-term financial success.
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.
What to avoid when creating a socially responsible business model.
Becoming a socially responsible business can be simple, but there are a few caveats.
i) Don’t choose unrelated initiatives; Avoid participating in charitable efforts that are not related to your core business focus or that violate your 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 invest in a project in your community.
ii) Don’t use CSR as a marketing scheme; don’t use CSR opportunities solely for marketing purposes Running a corporate responsibility campaign as a quick marketing scheme can backfire if your business doesn’t follow through. Instead of trying a one-time stunt,adopt socially responsible business practices over time. Employees and consumers react positively to companies that embrace long-term social responsibility.
iii)Don’t wait for the industry to catch up;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.
The Bottom Line
Socially responsible companies cultivate positive brand recognition, increase customer loyalty, and attract
top-tier employees. These elements are among the keys to achieving increased profitability and long-term financial success. 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.