Good business means good profits: the role of CSR
By Alan Tyrrell, Director, PSG Plus
As many as three quarters of global CEO’s agree that satisfying societal needs beyond those of investors is important *. Consumers too are calling for more responsible business practices and 89% of Irish people* believe it is important that companies show a high degree of social and environmental responsibility. Against that backdrop, having a clear Corporate Social Responsibility (CSR) strategy is no longer a ‘nice thing to do’ it is a must do for every progressive business. It makes good business sense and helps to support good profits.
CSR is not a new concept but its rise to prominence has been driven by four seismic shifts in society namely:
1. Mistrust of large organisations;
2. Rise of consumer power through communication channels like social media;
3. Rise of shared values;
4. The quest for meaningful connections with the brands we choose.
These changes, driven increasingly by social media and the changing way we engage with stakeholders, mean that CSR is an incredibly powerful tool to build consumer trust, support employee engagement, and drive reputation with multiple stakeholders. Whether your business is banking, pharmaceutical, technology, professional services or any other sector, a CSR strategy should play a vital role in your business growth plan.
Where to start…
With ongoing resource scarcity – on both a global and local level – the challenge with CSR rests in where to start. Many companies who already have a clear and compelling aspiration to be a good corporate citizen, struggle to evolve their aspiration into a tangible and measurable CSR strategy that is fit for purpose in their business. This struggle is clearly in evidence in Ireland where more than half of consumers (54%) are unaware of any cases of particular companies helping the community or society in any way.
While the not-for-profit sector is often seen as a starting point, CSR is also about how you do business rather than the business you do and the days of CSR being the annual corporate cheque to a good cause are long past. A strong CSR plan, one that influences stakeholders and creates opportunities for a business to market itself, has to start with integrity in the way the company operates.
One of the most potent ways of building credibility and demonstrating integrity as an organisation is to create relevant alignments and partnerships that support improvements in society. The most sophisticated programmes build a clear and tangible connection between CSR activity and the company’s overarching business strategy and day-to-day business activity. This means that business objectives and societal objectives are fully aligned rather than operating as distinct silos.
An excellent example of this is the shoe brand TOMS. For every pair of TOMS shoes sold around the world, one pair of new shoes is donated to a child in need. A simple concept yet incredibly effective and the result is a solid brand built on strong ethics and worthy of consumer trust. The business has also grown to become an estimated $100million company in the eight years since it was set up.
Three pillars for your CSR strategy
A successful CSR strategy should be built on three pillars:
1. Involve and mobilise employees: A truly integrated strategy will link CSR goals and objectives with an employee’s own targets ensuring that CSR is part of their day-to-day role and they should be evaluated with this in mind.
2. Clear Mission Statement and Policies: The CSR activity needs to include a mission statement and policies including how partners are chosen. Partners and projects should have the same values and understanding of the partnership and goals. This should be communicated internally and show clear alignment with the outcome of your CSR Audit.
3.A Purpose that is linked to the Company Strategy: The strategy should directly link to your business fundamentals, values and objectives. If the CSR strategy is standalone it will usually be ineffective, but when it is tied to the company strategy it can help move the company forward on a number of key metrics including sales, reputation and employee engagement.
All evidence points to the fact that businesses who invest in and actively participate in CSR activities, gain both financial and reputational competitive advantage over peers who do not engage in CSR. When implemented candidly and leveraged in a smart way, CSR programmes can improve corporate reputation and strengthen customer engagement as well as positively impacting internal communications. Not to mention the fulfilment of knowing that you have contributed to helping others.
Alan Tyrrell leads PSG Plus, the corporate and reputation management business of PSG Communications
(www.psgcommunications.ie), Ireland’s leading communications group.
* PwC CEO Pulse Survey 2014.
* Consumer Attitudes towards Corporate Responsibility conducted by Business in the Community Ireland.
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