Corporate social responsibility or ‘CSR’ is a strategy today to connect with your customers, grow your business, and differentiate from your competitors.
CSR is not a new phenomenon in the business world, but it has only recently been more prominently featured in many companies’ strategic marketing plans. For instance, you can think of CSR as a big umbrella that collects brand social responsibility, activism, announcements, and diversity.
So, how can we wrap our minds around this recently-applied concept?
First, let’s start with tackling what CSR is and then review its main components, benefits, and how to start a CSR initiative.
First things first, what is CSR?
Business-wise, CSR is a self-regulating business model that aims to help a corporate be socially accountable to itself, its stakeholders, and the public through practicing CSR activities.
However, this definition might be hard for some people to grasp, so let’s break it down in a simpler way; CSR is a type of marketing strategy based on the concept that a corporate is a citizen in society responsible for its own actions and social impact, also known as “corporate citizenship”.
This might sound similar to philanthropy, yet, they’re two completely different things.
Difference between CSR and philanthropy.
Corporate social responsibility and philanthropy are two similar concepts that can overlap when it comes to practice. Both concepts are used by corporates to deliver the company’s goods and resources to the community. You can look at both concepts as “giving back to society”. Nevertheless, they both share drastic differences.
Philanthropy is about contributing to societal issues and attempting to solve them by directly donating financial resources. On the other hand, corporate responsibility is contributing to societal problems by adjusting internal operations and minimizing the harmful impacts on the environment and society.
All philanthropy is CSR but not all CSR is philanthropy!
After clarifying the main difference points in both concepts, we can now say that philanthropy is a part of CSR programs. But, not all CSR activities are considered philanthropic. Social responsibility is more about long-term operations and outcomes.
The triple bottom line of corporate social responsibility.
It all comes down to this! The 3 P’s of CSR, also known as: ”the triple bottom line”. This is where CSR programs take long-term planning. It’s a framework designed to draw a clear path for corporates on how to reduce negative impact, increase positive values, and solve issues in the community.
So, what are the 3 P’s of CSR initiatives?
Mainly, socially responsible companies build their social responsibilities around 3 pillars:
Companies use these three pillars to set their goals, operational strategies, and long-term objectives regarding the community they serve. They later use them as metrics to determine how successful they’ve been. This is to say that if a company is focused on only one pillar, it would not succeed in completing a successful CSR program.
To clarify in detail how socially responsible companies develop a successful program, we have to break down each pillar of the three.
This pillar takes into consideration all the companies’ stakeholders including investors, employees, customers, individuals in society, and even future generations.
So for example, CSR in this specific pillar can be in the form of increasing citizens’ awareness and knowledge, providing a safe work environment for employees, promoting a diverse work environment, emphasizing human rights, and terminating any operations that can cause harm to individuals.
Moreover, it’s about creating a long sustainable knowledge for people that future generations will benefit from. For example, companies teach individuals about the danger of smoking without making any profit in return, that’s called leaving a mark that might benefit people.
The second pillar takes into account the environmental issues and how to prevent them. CSR in this form is when companies start and participate in initiatives aiming to reduce or prevent the negative impact on the environment produced as an outcome of companies’ operations. Companies do this by alternating some toxic materials with environmentally-friendly materials or finding a sustainable way to get rid of their waste.
This last pillar deals with how can companies benefit the economy that it’s part of. It’s called prosperity because companies are required to prosper the economy of the society they’re part of. For instance, this can be done by providing more job opportunities to reduce unemployment or generating profits that benefit society.
3 successful CSR examples.
Lego has a clear mission regarding sustainability. Its primary aim is to develop children’s creativity and skill through fun and entertaining games. This contributed greatly to the educational rate in society.
Moreover, Lego aims to reduce its carbon footprint to maintain a healthy environment. Therefore, it reduced its box sizes by 14% to reduce the amount of carbon used in packaging. By 2030, Lego aims to use environmentally-friendly packaging materials.
Take a look at Lego’s sustainability statement here:
Another great example of CSR is Adidas! The brand not only operates with ethical standards to protect its employees and the environment, it created partnerships to attempt to turn plastic waste into high-quality sportswear!
Read more about this initiative here:
3. Indigo Reach
Indigo Reach has always been partnering up with organizations to maximize positive social impact. The company’s main focus is to raise education among children and other society members. Additionally, it aims to bring issues up to light such as women’s empowerment, a healthy environment, and other controversial issues.
Read more about Indigo Reach’s CSR strategies here:
Why do companies create and participate in corporate social responsibility initiatives?
Here comes the million-dollar question!!!! Why do companies need to go through the hassle of developing CSR strategies?
The answer is quite simple, it’s called brand reputation. By creating and participating in CSR plans, companies maintain a strong positive reputation in the eyes of their target market.
Around 77% of customers are motivated to make purchasing decisions from socially responsible companies. The benefits of CSR programs for a company are uncountable; positive reputation, strong credibility, high profits, and the ability to influence stakeholders.
5 Tips to start a CSR initiative.
So after going through the main CSR components and benefits, the question remains: how can I start my own initiative?
Below are some tips that might help you:
- Research social issues that need solving
- Create strong partnerships to support you along the way
- Draw a clear strategy
- Set your goals and objectives.
- Design an action plan with a specific timeline
Having a strong corporate social responsibility program helps your company maintain a great image and have a loud clear voice in society.