The Ultimate Guide to Corporate Social Responsibility (CSR) with Step-By-Step Instructions
Consumers want to do business with companies who practice corporate social responsibility – and for good reason.
Companies that have a good CSR program have a long-term view on doing business and understand their impact on society. These companies know their business has a ripple effect, so they focus on how they can do the most good without sacrificing profits.
Companies that take the time to design and implement a thoughtful, intentional CSR strategy are often rewarded with loyal customers, a strong, talented workforce, and a positive public image.
In other words, consumers want to buy from businesses that are making a lasting positive social impact and employees want to work for those same companies doing good in the world.
Corporate social responsibility (CSR) helps create a framework for greater corporate purpose, and promises a better future with sustainable business operations.
In this Ultimate Corporate Social Responsibility Guide, we define corporate social responsibility and explain how to align and leverage CSR best practices for your company. We also give you tips on how you can make your company socially responsible and how to make the case for including CSR programs to your executive team.
What is Corporate Social Responsibility?
Corporate social responsibility is the integration of societal and environmental concerns into the strategy and operations of a business.
It consists of initiatives and policies founded on the principle that companies should play a positive role in the community and be accountable for the impacts they have on society as a whole, alongside making profits.
Corporations accomplish this by ensuring existing business practices are responsible and sustainable, and that corporate philanthropy supports causes that are meaningful and aligned to their core business.
With a commitment to implement a strong CSR strategy, companies have an opportunity to determine where and how their business intersects with communities. They can support solutions to a range of social problems like poverty, hunger, and disease.
For example, the food company Campbell’s saw an opportunity to align its core business with the challenges surrounding access to healthy and nutritious food. In response, they implemented a 10-year program to improve food access in Camden, New Jersey.
Companies also have a responsibility to protect the environment, maintain a safe, inclusive workplace for employees, and even consider how a portion of profits could support social and environmental initiatives, such as programs that provide clean water to those in need, or help maintain and increase access to free public parks in underserved communities.
Companies that operate with CSR best practices are proud to share how they give back to society, often through cause-related messaging, to encourage employees to volunteer and customers to support business.
As a byproduct, companies that grow in size also grow the size of their CSR programs. This growth gives corporations the opportunity to make a larger social impact as well as bring in more profits.
Why does CSR Matter?
Growing expectations by consumers and employees around the positive role that companies can and should play in society means that CSR matters more than ever. Increasingly, it can impact the bottom line – with consumers rewarding companies for their efforts to operate responsibly by purchasing their products in larger quantities, and with higher prices, just to name a few.
Corporations must learn how to adapt to the demands of this shift in consumer behavior while continuing to produce the goods consumers want.
Reasons why companies practice corporate social responsibility
In the past, a corporation’s main responsibility was to make money for its shareholders. And while that is still important, it is also true that shareholder value can be increased through a business model that is more responsible and sustainable.
An example of a company that has grown and benefited by integrating CSR into its core business practices is Dr. Bronner’s. Not only has their CSR program improve customer loyalty, it’s helped make a positive social impact.
Employee Engagement and Retention
Employees, especially the Gen Z workforce, increasingly want to work for a company that aligns with their values. Employees are most engaged with a company that is giving back to the community. A growing trend in business shows that employee satisfaction and employee-to-company relationships directly impact performance.
Companies with strong CSR practices can see increased productivity from their employees, less turnover and attrition rates, less absenteeism, enhanced loyalty and goodwill towards the organization, and positive word of mouth.
As a byproduct of a company’s CSR efforts, employees also feel their individual interests being taken care of, especially for those who offer employee benefits packages that include health, retirement, and charitable giving programs that empower employees to give to charity.
Attract and keep customers
It is possible that some, if not most, of companies’ customers will have a social agenda of their own and may not be willing to support a company that is not socially responsible. Research has shown that customers are four to six times more likely to buy from and trust a company that has a strong sense of purpose.
The companies that can tap into consumers’ sentiments around social and environmental issues and prove they are responsible corporate actors will likely have an edge over competitors who don’t.
It’s no secret that a company’s reputation and their social responsibility are closely linked. Practicing social responsibility gives a company a chance to have the secondary benefit of making a positive impact on their reputation.
Having a good reputation in the community and with the public is a major factor in growing a successful business.
Corporate social responsibility benefits
While few People Leaders see CSR as a burden of business operation, corporate social responsibility campaigns actually afford several benefits to businesses.
A good CSR campaign that promises to improve employee retention saves a company in onboarding and training expenses as well as the opportunity costs that come with losing talented employees.
Furthermore, companies with useful CSR-supporting software can save on hiring data-entry specialists. Tools like Groundswell can cut out the administrative duty needed for managing a corporate giving program.
How to Build a CSR Program
- Identify important company goals
- Understand consumer interests
- Brainstorm programs
- Carry out program plans
- Measure results
Designing and implementing a CSR program must be guided by the company’s business strategy, customer expectations, and employees’ interests. It is often shaped by the company’s operational footprint, the industry or sector, and where employees are based.
1. Identify important company goals
The first step is to identify and prioritize important company goals and how the CSR program supports those. This includes understanding your industry and the challenges that you are going up against, both today but also what is on the horizon.
Take note of how the business is going, who the detractors are and who the supporters are. This information will help guide your CSR campaigns during planning.
2. Understand consumer interests
Put yourself in the shoes of your customer and what they might be looking for. You’ll find this exercise enlightening and helpful in deciding where to put your resources. Do they support your business (product, service, etc) because of an existing CSR program that inspires them?
Aligning your programs to not just meet the expectations of your customers but give them a sense of pride and true connection to your business puts the company in a better position to compete with companies offering similar products or services.
It also helps to find out what employees care about. Often, employees are also consumers, so getting to know your workforce can provide strong insights.
3. Design programs
The communities closest to your business, its operational footprint, and reach of the product or services, will be the first to experience your social impact. This can be mapped based on geographic footprint as well as demographic groups. Based on this mapping, you might identify and provide funding to nonprofits that are serving those communities closest to the business.
If your employee base is also local, then supporting local schools, community centers, and other social programs can result in a healthier, thriving workforce.
Aligning your CSR programs with stakeholder interests helps your company’s reputation, as well as helps build stronger, positive relationships in the community.
As you brainstorm and design programs, think of ways you can make a positive impact on the lives of your employees, customers, and the broader community.
During the design phase, it’s also important to articulate your overarching goals and develop Key Performance Indicators to help you measure progress against those goals. This is a critical part of program design that will enable you to report back to internal and external stakeholders on the value of the programs.
4. Carry out CSR programs
Once the planning stages of your CSR program are complete, it’s time to carry out your campaigns.
After some time, your company’s CSR program will go through several changes and continue to refine itself. As long as your team puts an effort in organizing and managing the CSR program, you can feel confident that you’ll develop a program that works best for your business.
A great way to get started with a CSR program that requires little-to-no administrative requirements, corporate giving and matching programs work well.
5. Measure results
In order to celebrate the successes but also make necessary adjustments, it’s important to gather data and keep track of your progress by measuring your program’s impact.
Some key performance indicators (KPIs) of a good CSR program could include a number of community members served/impacted by the nonprofit programs your company supports; level or percentage of employee engagement in a giving or volunteer program; and an improved or positive ‘score’ on CSR rankings (e.g. Dow Jones Sustainability Index, 3BL Corporate Citizens Awards, Sustainable Brands, etc).
Examples of Companies with Amazing Corporate Social Responsibility Programs
Patagonia is an outdoor clothing company based in Ventura, California. Their mission is to create quality products that last a lifetime.
In addition to its sustainability practices and its clothing-repair program, Patagonia donates its profits to its nonprofit, Holdfast Collective, an organization dedicated to fighting the environmental crisis and defending nature.
Starbucks is a coffee company based in Seattle, Washington. This people, planet, and profit-positive focused company has CSR programs focused on inclusion and diversity.
Starbucks established the Starbucks Foundation in 1997, a 501(c)(3) charitable organization with the goal of strengthening humanity by uplifting communities. As part of their mission, the have the goal of hiring 25,000 US military veterans and spouses by 2025 as part of their program.
Toms is a shoe company based in Los Angeles who pioneered the One for One model–which was a program that gave away one pair of shoes for every pair sold.
Today, Toms gives away ⅓ of profits to fund grassroots initiatives to help those in need of support for mental health. Since 2006, Toms has given away over 100,000,000 shoes and impacted just as many lives.
Bombas is a clothing company based in New York whose mission is to put thoughtfully designed, essential clothing into the hands and onto the feet of those in need.
The company donates the #1, #2, and #3 most requested items to homeless shelters as well as donates one pair of socks for every pair of socks purchased. To date, Bombas has donated over 75 million items.
Pitching your CSR Program to Your Executive Team
1. Frame Your Pitch
When pitching your CSR campaigns to your executive team, you want frame your presentation in a way that speaks to why the programs are valuable to the business and not just “for the good of society.”
Executives have a responsibility to grow the business and return value to shareholders, so a CSR program needs to stay aligned with business objectives to be considered worth the budget required to execute it.
Framing your pitch to speak on the goals of the business, how the CSR program will help employee performance, how the program aids in employee retention, and how it reduces the cost of onboard and training new employees will help your executive team understand the benefit from a business point of view.
2. Collect Supporting Data
As you create your presentation, include a section that discusses the impact CSR campaigns have had on business results in recent years.
Look for information highlighting employee satisfaction and retention as a result of CSR programs as well as reports on employee productivity and performance.
There’s a strong correlation between employee performance and CSR programs that have been proven through scholarly research.
The Wall Street Journal reported companies experience 52% lower turnover among newer employees involved in corporate-purpose programs.
3. Choose the Right Program Software
Part of managing your CSR programs is having the right software to support your team’s needs.
Depending on the CSR programs you have in place, there are a handful of software you can use to take the hard work out of implementation, organization, and management.
For example, when considering how best to empower employees to donate to charities, Groundswell Giving is an example of a corporate giving platform that takes the work out of managing a workplace giving program. What’s more, Groundswell provides program administrators easy access to the data to help report back to key internal stakeholders about the causes that are supported, top charities, total funds sent to charities, and level of employee engagement in the program.
4. Present to Your Team
During your presentation, be sure to communicate how the corporate social responsibility program will help the company achieve its larger business goals.
While you’ll want to speak to the broader importance of practicing corporate social responsibility, your message will resonate most with the executive decision-makers when your message is paired with the business case for the CSR programs.
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