Crucial Conscience: The Rise of CSR
Although the term “corporate social responsibility” (CSR) entered the business lexicon more than 40 years ago, the idea that CSR is crucial to the success of an organization only took root as recently as a decade ago. As a result, more and more companies have adopted CSR practices ranging from environmental initiatives to charitable donations. In fact, according to Foreign Affairs and International Trade Canada, almost 80% of companies listed on the TSX currently report on their CSR activities for all to see.
Who cares about caring?
So why has CSR become so important? What happened to the days when companies were beholden only to their shareholders so long as they abided by the laws of the countries in which they operated? The answer undoubtedly lies with the consumer. Modern environmental, human rights, and economic concerns saturate the media (especially social media), making people very aware of how companies operate around the world. If a company’s influence is negative, word gets out faster than ever before, thereby galvanizing consumers, particularly the young, who can easily create globally viral campaigns to smear the company name and gut its bottom line. Not only that, but survey after survey indicates that consumers actively seek out brands that reflect their sense of social justice.
This new reality at least partly accounts for the attention companies are now paying to CSR. And that correlation between the rise of social media and the rise of CSR has of course drawn criticism, the most common of which reduces CSR to nothing more than a marketing and PR ploy. However, the truth is more nuanced. Better customer relations and, in some cases, investor relations aside, businesses are realizing that their own sustainability is tied to many other types of sustainability – and that doesn’t just refer to cutting costs by going paperless or turning off the lights at night. Essentially, it means that forward-thinking businesses are investing in the long-term preservation of the environment and the prosperity of the economy because, while short-term gains may make shareholders happy today, a devastated tomorrow is good for no one.
Businesses also have to keep their employees happy if they intend to sustain themselves. Employee relations is a large component of CSR because, simply put, people like working for companies whose values reflect their own. And this is especially true of the Millennial Generation – that same group for whom the use of social media is second nature. If your employees can’t take pride in the fact that they work for you, they’ll stop working for you, spread the word as to why they aren’t working for you, and focus their energy and innovation on advancing another more philosophically agreeable organization.
Do the right thing
So what can businesses do to become more socially responsible? Popular CSR initiatives include global-mindedness (essentially, ensuring that your positive effects in the Western World are not offset by negatives in the Developing World), transparency, and, of course, environmental policies to name just a few. However, to institute/improve CSR, it’s important to first investigate what kind of initiatives you can realistically take on and get feedback from all stakeholders involved (including employees). Once you’ve settled on your initiatives and set them in motion, it’s also imperative that you then effectively communicate them throughout your organization and to the public. Despite what the cynics might say, marketing your CSR is about more than building brand loyalty; it’s about perpetuating a trend that ensures the preservation of your business, a thriving economy, a cleaner environment, and an overall better world.