Businesses are increasing their efforts to be socially responsible regardless of whether they’re promoting women’s rights or protecting the environment or trying to eradicate poverty on a local and national or global scale. From a visual standpoint, companies that are socially responsible present more appealing images to their customers as well as shareholders which can improve their bottom line.
Corporate Social Responsibility (CSR) Definition
Socially responsible business practices go in the direction of getting customers to stay loyal and are crucial for a business’s longevity. Additionally, many people who are aware that a portion of the company’s earnings will go to charitable causes that are dear to them will happily offer a price increase for products.
Businesses can also see more foot traffic if they’re devoted to helping communities in their local. For instance, banks that offer loans to households with low incomes will likely experience an increase in sales due to.
Increases Employee Motivation
Social responsibility can be a powerful way to increase the engagement of employees. Companies that have social responsibility tend to attract workers who are keen to contribute positively to the world, in addition to getting paid. In large organizations, they have an advantage in numbers. the collective efforts of employees can yield significant results, which boosts the morale of employees and increases productivity.
As per Harvard Business School, nearly 70% of employees claim they wouldn’t want to work for a business without having a clear motive. 93% of those who work for firms that have a clear sense of mission say they’re more motivated and committed and 92 percent of employees working in a company that is socially responsible believe they are more likely to recommend their employer to others seeking jobs.
Research has shown that employee engagement directly impacts the overall performance of a business and the bottom line: employees who are engaged are able to increase by 17% in productivity, are better-off by 21, and may reduce absenteeism by 41%.
To summarize even a modest investment in social responsibility initiatives for corporate employees can boost employee engagement and influence how profitable the business could be.
Community Support and Customer Loyalty
Social responsibility serves as an opportunity for both companies and customers alike to create an impact in local and international communities. Companies that adopt an initiative to promote social responsibility that is consistent with their core values can improve the retention of customers and increase loyalty.
Research has shown that 87 percent of American customers prefer to purchase products from a business that promotes an issue that they are passionate about and 76% are hesitant to buy a product they learned that a business was a supporter of an issue that is not in line with their values.
Community-oriented businesses often get an advantage over their rivals due to the superior image of their brand. For example, Tesla Inc. (TSLA) CEO Elon Musk has successfully attracted environmentally-minded consumers with his line of cutting-edge electric cars and green automotive products.
Globally, lives have been impacted by socially responsible initiatives and community involvement embraced by TOMS the well-known brand of shoes, in the fifteen years since its beginning.
Examples of Corporate Social Responsibility
Coca-Cola Company (KO)
In 2010 Coca-Cola began 2010 the 5by20 program to help empower women all over the world.
The company’s statement read:
Through our 5by20 programs all over the world, we empower women entrepreneurs with the tools to overcome economic and social obstacles by offering business-specific education and accessibility to banking services and assets, as well as connections to mentors and peers. Women who participate in 5by20 are employed in various roles throughout the value chain, including suppliers, producers, retailers, and artisans, among others.
Visa Inc. (V)
By implementing its program for financial inclusion Visa has come up with innovative methods of bringing digital money to areas in which the financial infrastructure does not exist, or to those who aren’t able to access the financial system, such as those living in developing countries.
The company said:
Nowadays, around half of the population of adults is in informal economics, working only in cash. To be among these estimated 2 billion individuals is to have to face financial hurdles which make life risky and costly as well as inefficient. Financial inclusion can help put people on the path to get towards a better future and makes them more productive, empowered citizens which create business opportunities and boost the growth of our economy.
What Is the Difference Between ESG and Social Responsibility?
Both terms are used to describe the social responsibility of business. While Corporate social responsibility (CSR) makes businesses account for their social obligations in a way that is qualitative and environmental, social and management (ESG) assist in measuring the social impact of these efforts.
Socially conscious investors utilize ESG criteria to evaluate possible investments.
How Can a Company Be More Socially Responsible?
Even the smallest of actions could have a significant impact on an entire community. Giving money or resources to charitable organizations can make a massive impact, even though small businesses or startups might not be able to make a difference. Businesses can begin by organizing small events for fundraising and encouraging volunteers, setting up an objective social mission with clear objectives, as well as implementing education programs for their employees, or collaborating with companies with similar values.
What Are the Benefits of Corporate Social Responsibility?
Engaging in CSR improves customer loyalty and retention, enhances employee engagement, boosts branding, attracts the best talent and investment opportunities, and can make a significant difference to the bottom line of financials.
Socially responsible businesses create a positive brand image, boost the loyalty of customers, and also attract the best employees. These aspects are among the key elements to increasing profit and long-term financial success.