Reinventing CSR for long-term growth

THE CORONAVIRUS DISEASE (COVID-19) has caused massive disruptions to public health systems worldwide, and its impact has extended to the corporate world as well. As companies navigate the pandemic, their approaches to corporate social responsibility (CSR) have evolved, reflecting a broader awareness of their social, environmental, and economic responsibilities.

Although the foundational principles of CSR have remained unchanged, the pandemic has highlighted new challenges and opportunities for businesses committed to upholding their ethical and social responsibilities. Sustainability and social responsibility have become essential aspects of business strategies, and companies are now encouraged to take into account their impact on the economy, environment, and society.

A report by Deloitte highlights that CSR is no longer seen as just a philanthropic activity, but rather a strategic business imperative that can drive innovation and long-term growth. In fact, 85% of board directors see CSR as an important tool for achieving competitive advantage. Meanwhile, 92% of respondents believe that CSR makes their company more attractive as an employer and increases employee loyalty.

The pandemic has amplified existing societal issues and new challenges, such as healthcare disparities, economic inequality, and environmental degradation. Hence, refining CSR goals allows companies to realign their initiatives with these evolving needs, ensuring maximum impact and relevance.

According to an article published by Harvard Business School, nearly 99% of CSR professionals acknowledge that COVID-19 has impacted their CSR efforts and initiatives, leading to adjustments in budgets and partnerships to address issues like food insecurity, healthcare disparities, education, and more.

Another report by Deloitte suggested that the successful CSR strategy is built around a clear purpose. This purpose should be integrated into the company’s corporate strategy, outlining its ambitions and how it creates long-term value for stakeholders through ESG targets. When companies adopt a purpose-driven approach, they can align their CSR initiatives with their broader business goals, which fosters authenticity and trust among all stakeholders.

In addition, the similar report recommended that companies should analyze the areas where they can create the most value. This involves taking into account the perspectives of suppliers, customers, employees, shareholders, and society as a whole.

UNDERSTANDING THE NEEDS OF COMMUNITY

Increasingly conscious of their impact on society and the environment, consumers are looking to do business with companies that share their values. This shift has led to an increased focus towards purpose-driven organizations that prioritize social and environmental responsibility alongside financial success.

A report published by Harvard Business Review said that creating value for the customer, positively impacting society, and inspiring innovation and positive change are key factors that drive an organization’s purpose. As a result, businesses are increasingly expected to contribute to the greater good, whether it’s through charitable giving, sustainability initiatives, or other forms of social responsibility.

According to Deloitte, it is important to identify the primary stakeholders, understand their priorities, and acquire the necessary skills to address their needs. Early involvement of stakeholders allows companies to ensure that their CSR efforts align with the needs of the communities they serve, which in turn, enhances their credibility and establishes long-term relationships.

Businesses can also ensure that their CSR initiatives lead to scalable projects with measurable business impacts by implementing governance measures. Deloitte suggested that conducting regular materiality assessments can help organizations stay mindful of changing stakeholder expectations and societal needs, which in turn enables them to be more responsive and effective in their efforts.

PRIORITIZING WELL-BEING AND INCLUSION

Employees are the backbone of any organization, and prioritizing their well-being is not only the right thing to do but also makes good business sense. During the pandemic, companies have had to demonstrate their commitment to the well-being of their employees, customers, and communities. In response, many businesses have taken steps to support their employees, such as providing leave policies, flexible work arrangements, and mental health support.

According to Deloitte’s “Well-being at Work” survey in 2023, inclusive workplaces foster diverse perspectives and ideas, leading to enhanced innovation and problem-solving. It also promotes a sense of belonging and psychological safety among employees. This, in turn, contributes to a positive organizational culture and higher levels of employee satisfaction.

Furthermore, businesses that are committed to upholding their ethical and social responsibilities are likely to emerge stronger from the pandemic, with a more loyal customer base and a more engaged workforce. —