6 Reasons Why CSR Matters
TANYA KEWALRAMANI, CEO, CENTRE FOR ETHICAL LIFE AND LEADERSHIP ON WHY BUSINESS NEEDS TO HAVE A HEART
1 CSR MAKES MONEY SENSE
There’s hard financial data to prove that Corporate Social Responsibility ( CSR) means more profit for companies. The Meaningful Brands index, which is the first study that connects human wellbeing with brands at a business level surveyed 134,000 consumers in 23 countries and included 700 brands. The results showed that socially responsible brands that delivered a high level of satisfaction to their customers, topped the list and outperformed the stock market by a staggering 120 per cent.
2 SAVING COSTS
As non-renewable energy becomes scarcer by the day, it is also becoming more expensive. In this situation, the shift to recycling materials and the use of renewable energy is inevitable. Electricity prices are already part of the top five costs of most companies. Many progressive firms are now making the shift to solar power which enables them to know with certainty exactly what they’ll be paying for electricity for the next 25 years instead of being at the mercy of inflation.
3 ENGAGING CUSTOMERS
Involving customers in initiatives by a firm to contribute to society and saving the environment is becoming more and more common — whether it’s by giving a percentage of proceeds from sales to certain causes or organising marathons. In fact cause-related marketing is today an entire field on its own. As companies become more forward thinking they now consider the entire life cycle of the product. Many firms now encourage customers to return used products which can then be recycled. In addition to saving the environment, incentives provided to socially savvy customers ensures they buy more products.
4 ATTRACTING EMPLOYEES
A lot of human resource research has shown that talented employees prefer to work at companies that have a good reputation and CSR record. These days almost every business book I pick up, focuses on the innate need for people to contribute to a larger cause. Working towards a higher goal helps motivate employees way beyond a pay cheque at the end of the month.
5 BETTER BRANDING
One of the first reasons why companies began engaging in CSR was better brand positioning. In the early days CSR provided a firm with the opportunity to engage stakeholders while adding positive values to their brand positioning. It sent the message that the brand cared about the welfare of its stakeholders and had a desire to give back to society. CSR has come a long way since then. Today it has become more structured and strategic, but still remains a great opportunity for better brand building.
6 ENCOURAGING INNOVATION
A company trying to ensure all the materials in their supply chain are environmental friendly can come up with a host of innovations as they choose new ways to imagine the entire life cycle of their products, including what happens post-consumption. Many companies are today reaping the benefits of having come up with new socially responsible ways of doing business.