It seems many businesses, from small companies to the Fortune 500, are adapting the practice of corporate social responsibility (CSR). It’s important to be aware of what this is and perhaps even use some of the big ideas. There can be a lot of positive impacts if it is appropriately implemented – not only for the environment and society but for employees and profitability as well.
First, what is CSR? Academy and the press are continually inventing new terms, and sometimes it’s challenging to keep up. CSR is the action of including environmental and social concerns into a corporation’s business. This could mean everything from recycling to encouraging volunteering with nonprofits. Research from Harvard Business School shows that these activities receive broad support from both employees and managers alike.
Some managers might want to focus on the bottom line first. After all, it is the purpose of business to make a profit. But some programs can improve profitability.
For example, let’s say a business invests in solar panels to power its operations. This would cost money upfront, but it would save on energy costs over time. It might even be able to get a special low-interest loan from the government. Additionally, it wouldn’t be as vulnerable to spikes in oil and gas prices, which are often volatile.
Likewise, actions such as support for disaster relief or direct giving to nonprofit groups might not cost a lot of money but will improve employee satisfaction and loyalty. It factors into where the top talent decides to work. Many studies suggest that there is a positive correlation between the bottom line and CSR.
Adapting CSR practices might even attract more investors. New investment products being offered that only invest in companies that have a good track record with corporate social responsibility. They range from anything from mutual funds to exchange-traded fund (ETF) products. Attracting new investors increases the value of a business.
At first glance, it might seem to some business leaders that CSR is frivolous. But the numbers suggest something different. Paying attention to issues like the environment, philanthropy, ethical labor practices, and volunteering help the bottom line. It is wise to keep an open mind; perhaps you should consider implementing one yourself.