The evolving business landscape and the advancement of technology and information-sharing have made doing good more doable than ever.
Today, the three biggest factors of corporate social responsibility that are impacting social impact programs are: consumer and workforce demand, industry regulations and guidelines, and technology and reporting.
Why CSR and Why Now?
For years, organizations considered investing in a corporate social responsibility (CSR) program a low-priority business strategy. Companies might have made a one-off financial investment or hosted a fundraiser, but rarely was philanthropy a robust and ongoing strategic effort.
This is because leaders were reluctant to commit holistically to investing in impact, perhaps because they didn’t feel they had the resources to build a successful and scalable initiative or the capability to measure the results.
However, with new regulations around transparency and consumers gaining more visibility into companies’ sustainability and ethical practices (or lack thereof), scrutiny has become greater and expectations higher. Now, businesses have too much to lose by not developing a corporate social responsibility program. It’s a necessary competitive advantage to attract and maintain consumers.
The Top 3 Corporate Social Responsibility Factors
When developing sustainable corporate social responsibility programs, there are three key CSR factors to consider.
CSR Factor One: Consumer and Workforce Demand
The first major factor associated with CSR is consumer and workforce demand. When given the option, consumers, millennials and Gen Z’ers most of all, direct their loyalty and buying power toward brands that demonstrate shared values around social action. They want to see results and their patronage is contingent on it.
The concept of corporate social responsibility appeals to these customers, and in a recent survey of over 1,000 American consumers across generations, 68% of respondents said they would pay more for sustainable products, with Gen Z and millennials being the most likely to do so out of any other age group.
Additionally, a 2021 report by Business Wire further depicts just how much consumer purchase power is affected by a corporations’ sustainability efforts. The report notes that 76% of American consumers would switch to brands whose packaged products were more carbon-friendly, and “74% would switch gasoline brands in the same situation.”
Some business owners may think remaining neutral on social issues is the safest approach, but in reality consumers and employees want brands to take a stance–over half of millennials surveyed said they’re more likely to buy products from companies with an activist CEO and 44% of millennial employees would feel more loyalty toward their CEO for taking a stand on a contentious issue (versus 19% who would not).
CSR Factor Two: Industry Regulations and Guidelines
Regulations, laws, and guidelines are the second major CSR factors impacting program development. While there is no legislation enforcing corporate social responsibility programs, more regulations are emerging to increase transparency around business practices, such as reporting conflict minerals in products and workforce diversity statistics.
There are also rewards for charitable organizations, such as tax benefits, and a recent article by Nerd Wallet gives insight into how corporations can best utilize such benefits.
Global guiding principles, resources, and best practices offer assistance and recommendations, such as The Ten Principles of the UN Global Compact crafted by the United Nations, which outlines how businesses can operate more sustainably and responsibly in terms of human rights, labor, the environment, and anti-corruption.
Since the practice of corporate social responsibility by definition is largely voluntary, companies have a great deal of freedom in creating a corporate social responsibility initiative that best meets their own goals and standards and the unique needs of their community.
CSR Factor Three: Technology and Reporting
Business leaders often have a misperception that ROI and social impact are too difficult to prove. This doesn’t have to be the case; especially today, as the ROI and social impact of a corporate social responsibility program are only getting easier to measure with progressive technology platforms and program management software that can streamline the advantages of corporate social responsibility by generating meaningful data and insights. TrustRadius has compiled a list of the top CSR software your organization can utilize to best measure social impact.
Companies can leverage advanced digital tools to efficiently track and measure data and impact like never before and use social media to showcase the results to the community and encourage employees and consumers to share, as well.
Now is the time to develop an impactful and measurable CSR initiative for social, economic, or environmental good – the market is ripe for it.
Next in this Investing in Impact Series, learn about Best Practices for Incorporating CSR into your Business.
To learn more about CSR, visit: www.Everfi.com/CSR