Corporate Social Responsibility and the Beating Heart of Business
Welcome to the new era of business where corporate social responsibility (CSR) isn’t just a buzzword but the beating heart of any legitimate and successful business. CSR is the responsibility businesses have, expressed through initiatives or strategies, to the society that exists around them (Heyward, 2020). Gone are the days of exclusively chasing profit margins; now, the focus shifts to prioritising people, the planet and society at large.
Now more than ever, stakeholders and consumers are scrutinising businesses for their impact on society. Society’s expectations are, rightly so, higher than ever, and their demands are increasing. This article outlines each dimension of CSR whilst arguing the importance of its implementation for any business wanting to survive. Throughout this article, attention is directed to the transformative nature of CSR from a preferable business practice to an absolute necessity. Society has woken businesses, whether they like it or not, and now they must deal with the symbiotic relationship between their success and the wellbeing of the communities and environments surrounding them.
The four types of CSR
CSR is traditionally distributed into economic, ethical, philanthropic, and environmental responsibility. For businesses to be truly socially responsible they must recognise their multifaceted impact, and extend their efforts beyond a singular approach, encompassing each dimension of CSR.
Economic Responsibility: Balancing the Books
In the quest to become socially responsible, firms must take a holistic approach to financial decision making. Businesses and leaders alike must understand that within today’s society there is no excuse for profit-centric attitudes, and that economic responsibility revolves around positively impacting humanity and environment.
Ethical Responsibility: Upholding Morality
Businesses who take ethical responsibility seriously ensure fair and equal treatment to every stakeholder, including management, investors, employees, and employees (Stobierski, 2021). This can be achieved in a number of ways, from enhancing employee well-being, to enforcing a sustainable and fairtrade supply chain.
Philanthropic Responsibility: Corporate Giving
Corporate philanthropy is a crucial tool within a firm’s ESG arsenal in which resources are volunteered towards initiatives to improve society. Businesses such as Warby Parker, the prescription glasses retailer, donates a pair of glasses to someone in need for every sale they make (Morgan, 2021). Today corporate philanthropy is expected by the society causing detriment to any businesses who fail to recognise this (Carroll, 2016).
Environmental Responsibility: A Greener Future
During this current climate crisis environmental CSR is more integral than ever, the ‘E’ in ESG is one of the driving forces in the world’s fight against climate change. Globally, all businesses have a responsibility to recognise their impact on the environment and make positive contributions to minimise the damage caused. Society wants to do business with companies they can trust and believe, therefore, eliminating waste and emissions whilst maximising sustainable practices are determining a business’ success (Mazurkiewicz and World Bank, 2004).
The Business Case for CSR
Enhanced reputation
Businesses with positive CSR practices often reap the rewards as a result, often the aim of businesses with strategic, rather than altruistic, motives. Firstly, strong CSR builds consumer trust, if businesses can communicate transparently with their customers, then relationships, trust, and respect can be formed (Lewis, 2020). Furthermore, businesses benefit from strong CSR through an increase in brand loyalty. Take Patagonia for example, an outdoors wear retailer with sustainability at its core. Patagonia publicly discourages people from buying their products, in an attempt to eliminate waste and overconsumption, this has led to overwhelming brand loyalty. Statistics support this, with 87% of Americans claiming they would purchase from a brand if they stood up for a cause they care about (Gibbons, 2019). Therefore, strong CSR not only benefits society and the planet, but also increases brand reputation and loyalty.
Attracting and retaining talent
CSR is a beacon for prospective talent, luring and retaining employees with ethical, economic, environmental, and philanthropic commitments. Not only do firms with strong CSR offer tangible commitments to employers, but they can provide a meaningful purpose for the altruistic employee. Moreover, firms with positive CSR are likely to offer an array of additional benefits and perks to their employees. For instance, many businesses now offer wellness programs, free therapy and counselling, flexible working, and childcare support. The world is waking up, and employee retention is no longer dependent on workplace support, but encompasses comprehensive employee support beyond the confines of work (Franca, 2022).
The Beating Heart
Just as a heartbeat is integral to sustaining life, CSR is integral to the sustenance and success of a business. Society has decided the days of profit-centric businesses are over, now businesses failing to transform their CSR crumble. The CSR heartbeat provides the necessary trust, support, and foundations of successful businesses. Embracing CSR is no longer a choice, it’s a lifeline.
Bibliography
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Morgan, B. (2021). 20 Companies That Use Their Profits For Social Good. [online] Forbes. Available at: https://www.forbes.com/sites/blakemorgan/2021/10/26/20-companies-that-use-their-profits-for-social-good/?sh=40bb8c1e11a8 [Accessed 30 Jan. 2024].
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