Why CSI is important
CORPORATE Social Investment (CSI) promotes a vision of business accountability to a wide range of stakeholders, besides shareholders and investors.
Key areas of concern are environmental protection and the wellbeing of employees, the community and civil society in general, both now and in the future.
The concept of CSI is underpinned by the idea that corporations can no longer act as isolated economic entities operating in detachment from broader society. Traditional views about competitiveness, survival and profitability are being swept away.
Most business leaders are acutely aware of the problems and challenges our societies face. Having built a successful company, many seek to give back to their communities. They volunteer, donate, and fundraise. They strive, through their personal actions, to make the world a better place.
More and more, leaders recognise the opportunity to involve their company in changing their communities. By involving employees, customers, and other stakeholders, much more is achievable. And in the process, the company can become stronger and more sustainable than ever.
Companies that effectively engage in CSI experience many benefits. They enjoy a positive effect on staff retention, recruitment, and motivation. They experience increased customer satisfaction and loyalty, particularly when clients buy based on relationships, trust, reputation or brand.
Socially responsible companies, large and small, have better reputations, can better detect and respond to risk, and can anticipate the needs of their stakeholders with greater certainty. When things go wrong, they are more quickly forgiven for mistakes.
As a side-effect of their efforts, these companies can experience operational efficiencies and cost savings. They also have an improved ability to innovate, develop new products to meet customer needs, and leverage the creativity of their stakeholders.
When you identify your stakeholders, their needs and their expectations, and you make genuine commitments to do them more good and less harm, they respond by making greater commitments to you. These companies can ask for more from their employees, customers, and investors. And they get it.
Loyal customers make repeat purchases, make bigger purchases, and become product advocates. Loyal employees exert greater effort and commitment towards corporate goals in which they strongly believe. Top performers are less likely to go to competitors. This means lower turnover and training costs, and intellectual capital stays within the company.
Many traditional business processes are aimed at making important stakeholders (namely shareholders, customers, and employees) more satisfied. But satisfac- tion alone is not enough to keep customers coming back and to encourage employees to give their best effort. Loyalty—whether someone is committed to you for the longterm—depends on much more than just satisfaction. Social responsibility is powerful because it can drive loyalty directly.
CSI often results in efficiencies and cost savings. Companies showing an interest in environmental sustainability, for example, often cut costs on energy consumption or resource use. Companies that can create employee-loyalty by making the workplace more enjoyable and by committing to social responsibility, do not need to ‘break the bank’ to convince their best talent to stay.
Besides being more efficient, CSI often provides cost-effective opportunities, training and innovation. Corporate volunteerism programmes, a common initiative, are most commonly touted as a way to acquire new skills and develop teams, but employ- ees can gain new skills through a number of CSI programmes. And as the organisation becomes better integrated with its customers and other stakeholders, and as employees become more engaged with the company’s goals, there is often a significant increase in creativity and innovation.
We have also seen why corporate social investment is so important: it can have significant effect on a company’s stakeholders, its goals, and its performance. It can deliver strongly desirable moral and business benefits. Companies that engage in CSI effectively do more than earn the satisfaction of their stakeholders. They earn their trust and their loyalty. The bottom line? A stronger, more sustainable company in all ways: financially, ethically, environmentally, and socially.
Of course, nothing worth doing is easy and corporate Investment is no exception.