Corporate social responsibility (CSR) is a business practice framework that prioritizes positive social impacts of the company’s policies and practices in addition to generating profit. The basic goal is to improve communities, both local and throughout the world, by including social, environmental and business governance (ESG) considerations within all strategic decisions. By being “socially accountable” businesses generate considerable consumer good-will that ultimately be reflected in a better bottom line.
Katie Schmidt, the founder and lead designer of Passion Lilie, said that companies that implement CSR stand to benefit in multiple ways. “What the public thinks of your company is critical to its success,” Schmidt told Business News Daily. “By building a positive image that you believe in, you can make a name for your company as being socially conscious.”
Businesses ignore CSR at their peril. Recent research that 60% of Americans want companies to be at the forefront of social and environmental changes and nearly 90% would purchase products from companies that supports issues that were important to them as well. Perhaps more significant was that 75% said they wouldn’t buy from a company whose support of an issue differed from their own.
CSR also improves employee recruitment and retainment. Susan Cooney, head of global diversity, equity and inclusion at Symantec, said that a company’s sustainability strategy is a big factor in where today’s top talent chooses to work. “The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue,” said Cooney. “Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back.”
Companies’ CSR efforts usually fall within a few general areas including environmental programs that reduce their carbon footprint, improve energy efficiency and promote recycling. Besides being easy to initiate, philanthropy such as donations of goods, services and money to non-profits generate considerable good-will. Encouraging and supporting employees’ involvement in charitable organizations is also a common theme for socially responsible companies. Treating employees fairly and ethically is one of the most important characteristics of a socially responsible company, especially for those that operate internationally where the labor rules many be different than in the US.