What is CSR?

Corporate social responsibility programs create specific goals that companies work towards. This could be improving inclusion and diversity programs or minimizing the company’s impact on the environment. The goals of the company are widely known, helping shareholders and the public hold the company accountable.

Types of CSR Activities 

The CSR activities of a company can take on many different forms. In fact, most companies look to have some policy or mission statement in each of the following categories:

Ethical Responsibilities

Strategic corporate social responsibility often involves ethical duties, including treating customers and employees fairly, regardless of race, age, culture, or sexual orientation. Ethical responsibilities a company might adopt also cover reasonable and fair pay to employees, full disclosure of any issues, and adding transparency for investors.

Social Responsibilities

CSR policies will also include social responsibilities, like donating to charity, working with vendors that have similar missions and goals, and supporting the philanthropic endeavors of employees. Many companies will complete social responsibilities through event sponsorship and fundraising programs. For example, a company might sponsor a sporting event that is raising money for a specific cause.

Financial Responsibilities

Another branch of CSR is financial responsibility. When a company makes a promise to be more environmentally or ethically responsible, it needs to back the promises with financial investments in programs, product research, and hiring decisions. Without fulfilling promises made through CSR programs, you could hurt your company’s brand image.

Environmental Responsibilities

Environmental responsibilities are commitments made to bettering the environment. In recent years, companies have focused on environmentally friendly initiatives, especially as many countries are now requiring mandatory ESG disclosures. A company can implement environmental responsibility by reducing its carbon footprint and replenishing natural resources. For example, your company might choose to use reusable packaging while simultaneously launching a volunteering activity to plant trees in your community.

The Importance of CSR Policies

CSR policies are important for more than just your brand image. In fact, CSR efforts can spread positive change throughout your community and motivate other companies and employees to follow suit. Here are a few of the reasons why CSR practices are important:

Create a Better World and Society

CSR efforts support your local community. This could be setting up a fundraiser for a local family, offering a local resident a job, or reducing pollution. The right CSR program will create a better world and society, helping you make a positive difference.

Improve Brand Image

When customers know you have a commitment to making a positive social impact, they might be more willing to purchase your products and services. A recent study by IBM found that 84% of global customers consider sustainability when purchasing from a brand. If your company is known for sustainability, you will be able to improve your brand image and customer loyalty. This also helps your company increase sales and profitability.

Motivate Employees

The tone at the top matters. By prioritizing corporate social performance, you motivate your employees to make changes both in and out of the workplace. For example, if you have a recycling poster in your breakroom, your employees might recycle their used cans instead of throwing them in the trash. These habits trickle down to their personal lives, with employees implementing many of the same policies at home to help the environment and society.

Furthermore, employee motivation benefits your business in numerous ways. Your employees will be more excited and productive in the workplace, and they will talk about your company positively to friends and family members. This not only helps you reach your CSR goals but also improves your bottom line and profitability.

Attract New Investors and Employees

A Morgan Stanley survey found that 77% of global investors consider CSR practices before investing in a company. By focusing on corporate social performance, you attract investors to your company. This gives you the capital needed to grow, enter new markets, and make a larger social impact.

Just like CSR practices can attract investors, they can also attract new talent to your company. Employee retention and hiring efforts have been difficult over the past few years. One way to set your business apart from competitors is to prioritize CSR initiatives. When employees see that your company prioritizes CSR, they may be more inclined to join your team.

Set Attainable Goals

CSR reporting monitors your company’s progress toward its goals. For example, if you have a goal to raise $10,000 for a local community event next month, how much progress have you made? CSR reports gauge your progress and help you identify areas of improvement. Maybe you need to remind employees about your goals or market your fundraiser. Whatever the case, CSR sets attainable goals for your team to work toward.

The Relationship Between CSR and Business Strategy

Your business and CSR strategies work together to guide your decision-making. For one, your CSR integrates into your business strategy by impacting how you hire, train, and retain employees. If one of your CSR goals is to support the community, you might choose to hire a local candidate rather than a remote individual, assuming both candidates are equally qualified.

Additionally, CSR impacts your sales growth and acquisition strategies. Let’s say one of your CSR goals is to lower waste. When designing your new product launch, you might choose to use a cardboard package instead of a design with plastic. Keeping CSR in the back of your mind when making business decisions is important. It helps you excel in your social responsibility while also refining your business strategy.

How to Create Your CSR Plan

The process for implementing CSR practices will vary based on your goals and industry. However, there are a few steps to keep in mind when creating your CSR strategy.

Step 1: Define Your CSR Objectives

The first step in implementing CSR reporting into your company is to define your goals. Every business will have specific objectives they want to focus on. Revisit the different types of CSR and work granular goals into those categories. Remember, you don’t want blanket goals like “reduce waste.” Instead, you want specific objectives that your team can work toward. If you’re stuck on where to start, research the CSR policies of other companies in your industry.

Step 2: Set Project Goals

After you’ve outlined your corporate social responsibility goals, brainstorm individual project goals. For example, what can you do to reach each of your CSR goals? Who needs to be involved? What type of approval is needed? Take the time to develop an action plan on how you will reach your goals. For example, if your goal is corporate giving, which charities are you going to donate to? How will you raise funds?

Step 3: Gain Project Approval

Many CSR actions will require financial support. Before you start racking up charges for new environmentally friendly packaging or launch a huge marketing campaign for a fundraiser, get the proper project approval. Your CSR projects shouldn’t place your business in a tight cash flow position or take resources from other important areas. In many cases, you can leverage free advertising on social media.

Step 4: Deploy Strategies

Now, it’s time to deploy your strategies. In this stage, it’s important to keep everyone involved, from your employees and shareholders to external stakeholders, the press, customers, and followers. Broadcast your CSR priorities on social media and inform everyone about upcoming events. The more buzz you create surrounding your goals, the more impact you will have.

Step 5: Review and Adjust

Effective CSR programs make a commitment to positive change. This means that your programs will require constant attention and oversight. After each event or on a defined basis, such as quarterly, review your CSR reports to determine if any changes are needed. What was the impact of your actions? Are you following business ethics in your decision-making? If you’re struggling to manage your CSR, assign a team member to oversee operations and actions. Having a person to turn to with any questions or ideas is important to develop a robust CSR program.

Summary

• Corporate social responsibility, known as CSR, outlines a company’s commitment to enacting positive environmental and social change.
• There are four main types of CSR: environmental responsibility, social responsibility, financial responsibility, and ethical responsibility.
• CSR creates a better society, improves your brand image, motivates employees, attracts new investors and employees, and helps your team set manageable goals.
• CSR and your overall business strategy are closely related.
• Defining your CSR objectives, setting project goals, gaining project approval, deploying strategies, and reviewing your progress are the five steps to implementing CSR in your organization.