Most of us immediately think of nature conservation and eco-friendly practices when we hear the word sustainability. However, from a business point of view, sustainability isn’t just about the environmental aspect. Corporate sustainability stands on three pillars: environmental, economic, and social.
As consumer expectations have changed over the past decade, companies are finding ways to ensure that their activities are more socially responsible. Various societal issues such as sustainability and social justice are on the agenda today, and companies are choosing to address what makes the most sense for their businesses and their industries.
2020 surveys conducted by Deloitte revealed that despite the individual challenges and personal sources of anxiety that millennials and Gen Zs are facing during the pandemic, they have remained focused on larger societal issues.
CGS surveys of more than 1,000 people in the US found that more than half of respondents are willing to pay more for products and services from companies that are committed to positive social and environmental impacts, and two-thirds would prefer to work for these companies.
Although there is no single approach to corporate social responsibility, it is important to understand what CSR is. In this article, we’ll explain what these socially responsible business practices may look like and what’s just plain social washing.
Corporate social responsibility is by definition a company that is committed to positive change in the community, and even an overarching philosophy that brands pursue to make a difference in society and people's lives.
It is a comprehensive concept that can take many forms depending on the industry of the company. Corporate social responsibility means that a company must work in a way that promotes society, rather than contributing negatively to it. Companies can benefit society by strengthening their brand, their community, the health and well-being of their employees.
As important as corporate social responsibility is to the community, CSR is also valuable to your business. As businesses grow in today's fast-paced business climate, it’s important to design and implement socially responsible strategies that will pay off for your organization in the years ahead. This includes raising awareness and taking on action to support social causes that have a unique opportunity to create a positive impact.
An effective corporate social responsibility strategy is a combination of a number of factors, such as the company's business model, corporate culture, and company values. Firstly, a company must look at its own impact and adopt more socially responsible business practices within its supply chains. For example, most fast fashion stores nowadays are dealing with backlash from customers over the horrific conditions garment workers have to work in. A socially responsible company would look at its impact in this area and find ways to make the working conditions more humane. For larger companies, this will also mean holding their suppliers accountable and socially responsible.
A company has a special kind of responsibility to its local area and the people living there. However, for some large corporations, this social responsibility has extended as they’ve become increasingly global. Such companies are then responsible to communities worldwide, not just the spot where they were founded.
Companies can develop and implement their own fair trade practices, or become a member of Fair Trade USA, a global movement made up of a diverse network of producers, companies, consumers, advocates, and organizations putting people and planet first.
Diversity and inclusion go beyond just hiring minority employees. It also means fair compensation, promotion within the organization, listening to their concerns, and creating an environment free of stereotypes and discrimination. Feeling a sense of belonging at work is essential for employees to be happy in their careers.
A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. Organizations like Council for Supplier Diversity help diverse suppliers to expand and increase their bottom line by creating market share growth for minority, women, and service disable businesses through interaction with corporate members.
Once companies have rectified their own impact, some go beyond that and, in addition, support non-profit causes and social movements. While some companies certainly only do so to improve their image, rather than for reasons of empathy, taking action to support a social cause can do wonders for an organization’s reputation.
Standing against social injustices and discrimination is something every company should be doing. While this is not required by law in many regions of the world, companies arguably have a moral obligation to do so with the power that they possess.
It’s no secret that consumer support for ethical business has been growing. Consumers prefer to purchase from purpose-driven brands, companies that stand for a purpose that reflects their own values and beliefs, and will avoid companies that don't. The 2019 Edelman Trust Barometer Special Report: In Brands We Trust shows that the vast majority of consumers across markets, ages, incomes, and gender say that brand trust is essential to buying. Consumers reveal that:
Sometimes, companies may want to appear as a socially responsible business without actually doing any of the work. In these cases, they employ shady marketing techniques making consumers believe they’re being socially responsible; however, these claims are false or semi-constructed.
As a business, it’s crucial to remember that these techniques aren’t just unethical – they can also lead to severe reputation damage.
To be a good corporate citizen, companies must consider not only the impact of their actions on the environment but also their impact on their employees, customers, and employees.
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