Today’s consumers vote with their wallets and buy from brands that stand for something that aligns with their values.
In fact, 2 out of 3 consumers are willing to pay more for products made by socially responsible companies and 67% of consumers would pay full price for a product that supports a cause rather than buying one at a discounted price.
While there are many ways to communicate your brand’s purpose and values, corporate social responsibility (CSR) programs offer a powerful platform to tap into consumer sentiments and connect with your audience.
As millennials and Gen Z start dominating the marketplace, this means CSR and social media are closely intertwined. Brands that properly leverage social media to communicate CSR initiatives have the opportunity to communicate a broader message that will reinforce your brand identity, going beyond products and services to foster customer loyalty, build trust, and generate powerful word of mouth.
What’s Corporate Social Responsibility (CSR) and How Can It Benefit Your Organization?
CSR describes a company’s efforts to improve society in some way, ranging from donating money to charities to implementing sustainability initiatives in sourcing and procurement.
CSR is getting many organizations’ attention thanks to the rise of “CorpSumers” – a newly minted consumer segment that’s highly loyal to brands that align with their values. They believe that a brand’s mission and reputation is just as important, if not more so, than its products.
CorpSumers make up a sizable portion of the population with high spending power and they’re vocal about the brands that they support. For example, 76% of them have encouraged others to buy from a brand because they want to support the company that makes the product.
Besides appealing to this new consumer segment that considers companies to be positive change agents in society, organizations can benefit from CSR initiatives in the following ways:
- Improve their public image: buying from a brand that has a positive impact on the community makes consumers feel good. A favorable public image helps build goodwill, broaden your reach, and cultivate customer loyalty.
- Gain media coverage: CSR initiatives provide opportunities to increase your brand’s exposure, improve your organization’s reputation, increase brand awareness, and build brand equity.
- Increase employee engagement: employees that are proud of their company’s social responsibility involvement are more engaged in their jobs. Your CSR program can help attract and retain talent that is likely to be more productive and creative while lowering employee turnover.
- Attract investors: CSR is good for business and investors know that. They’re more likely to be attracted to and keep supporting companies that are considered socially responsible. Not to mention, being associated with a good cause is great for their reputation.
- Stay compliant: many CSR initiatives can help guide your corporation to avoid making ethically questionable decisions that will cause you to face public scrutiny or even investigation from regulatory bodies.
Key Areas To Implement Corporate Social Responsibility Initiatives
Selecting the right areas to focus your CSR initiatives can help achieve the highest impact for your organization’s reputation, attract talent that is a good fit for the internal culture, and align your brand with the ideal customers and investors.
Diversity and Inclusion
While gender equality in the workplace has been an ongoing discussion, awareness about the issues has been taken to new heights with recent news such as the #MeToo movement and Uber’s sexism and harassment scandal.
Today, consumers and employees expect corporations to expand the conversation on diversity and inclusion beyond gender. Organizations need to create a workforce that gives voice to various cultures, languages, ages, sexual orientations, disabilities, backgrounds, and experiences.
Having an inclusion and diversity policy will help create a company culture that attracts and retains talent from all walks of life, increase employee engagement, and augment your reputation.
A diverse workforce also contributes a wide range of perspectives that will help your company develop products and services, as well as a brand message, that’ll appeal to a broader audience in today’s diverse society.
Brand Activism
Consumers want to buy from brands that stand for a cause or represent values that they believe in. In fact, 91% of millennials and 85% of the average U.S. public would switch to brands that are associated with a cause.
Brand activism refers to a company’s involvement in initiatives that have a social, economic, environmental, or political impact. It can be expressed in many ways, such as public announcement, lobbying, donations, volunteering, or marketing messages.
Consumers demand transparency so brand activism initiatives need to permeate everything your organization does, such as building an internal corporate culture that aligns with the cause your brand stands for.
Choosing the right issues to advocate for and taking a bold stance will help you build brand recognition, connect with the right audience, increase engagement with the market, and cultivate lifelong customers.
Supply Chain Innovation
CSR can help improve the cost-efficiency of your business operations and offer the potential for growth while furthering the greater good. For example, innovation in the procurement process can reduce operating costs and your company’s ability to respond to market demand and therefore, has a substantial impact on the bottom line.
In fact, high-performing procurement organizations are found to have profit margins that are 15% higher than average. Meanwhile, 68% of businesses are leveraging CSR initiatives for growth.
CSR initiatives can also inform how corporations select and work with vendors in the procurement process. For instance, by choosing suppliers that use innovative technologies to minimize the environmental impact of the manufacturing process or employing workers in developing countries at a fair wage.
They can add business value through innovation in supply chain management by reducing wastage, discovering new sourcing opportunities, aiding supplier development and diversity programs, and fostering vendor collaboration.
Aligning procurement with your CSR policy will encourage vendors to innovate their processes and develop new technologies to improve the flexibility and cost-efficiency of the supply chain while allowing you to create a brand that’s attractive to consumers and investors.
Sustainability In Procurement
Every business on the planet will be affected by climate change. The key to staying relevant in this consumer culture is to employ innovative technologies and redefine workflow in the procurement process so you can address environmental and sustainability issues.
In fact, a study by Harvard Business School has found that companies with high-sustainability outperform their counterparts in both stock and financial performance in the long term.
With the heightened awareness of our supply chains’ effect on the environment, consumers will increasingly support brands that devote more resources to minimizing the environmental impact of their manufacturing and procurement processes.
A sustainable procurement practice aims to make economical and effective long-term decisions that benefit the company, customers, society, and the environment.
In addition, the product development process should take into account costs associated with a product’s entire lifecycle, from manufacturing process and maintenance to end of service time. For example, by avoiding the use of exploitative labor, sourcing from fair trade companies, minimizing the environmental impact of disposal, and supporting the recycling of parts.
Conclusion
Corporate social responsibility has a substantial impact on an organization’s brand image, business model, marketing strategy, ability to attract and retain talent, investor relationships, and procurement process.
In short, with consumers’ increasing awareness of businesses’ involvement in social and environmental initiatives, your ability to implement an effective CSR policy will directly affect your company’s brand equity, operating cost, and bottom line.
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