What is the corporate social responsibility impact on business?
Today’s modern consumer expects companies to think beyond profit, with the increased spotlight on corporate social responsibility (CSR), in the news and on social media, companies are facing more scrutiny than ever to effect change in their communities. While this is all well and good, it’s hard for a business to justify spending money on CSR if there is no clear impact of corporate social responsibility on business profitability.
Over the past few decades, consumers have increasingly chosen to purchase products from companies that do good. Inversely, the majority of consumers are also willing to stop purchasing products from companies whose values don’t align with theirs; especially on polarizing issues such as education, racial equality, and women’s rights.
In a survey of adult consumers conducted by EVERFI, 58% say the social impact of the company is important when deciding which product to buy; 76% said they believe engagement in the broader community is important to brand reputation; and nearly half felt that companies have an obligation to take actions to improve societal problems, even if those problems aren’t related to the company’s business operations. The survey results make it hard to deny the corporate social responsibility impact on business.
Need for Corporate Social Responsibility
CSR is now a business imperative. When organizations advocate for a social or environmental cause, it not only shows many benefits of corporate social responsibility to society, but it could benefit their bottom line, too–from generating a better brand reputation to greater customer loyalty. The key to creating ROI is to develop a strategic CSR program that resonates with consumers and truly makes an impact in communities and then effectively communicating the results.
Impact of Corporate Social Responsibility on Business Performance
EVERFI’s research analyzed consumer response based on their impact priorities within the following six categories: Education, Environment, Poverty/Economic Equality, Social Justice/Human Rights, The Arts, and Health/Sports. Seventy-eight percent of respondents listed education as an important area on which brands should spend their CSR budgets and 60% selected education as the most important.
Further, individuals who endorsed education seemed to be the most ardent consumers in terms of loyalty and engagement with a given business, as opposed to proponents of the other five categories. For instance, 76% of consumers who selected education as an important part of a CSR model said they would spend more money to patronize a business with good values versus 59% of the respondents who did not select education. They are also about twice as likely to engage with that brand via social media and by downloading its mobile app.
By making a CSR impact through education, specifically, may resonate with a particularly valuable population of consumers and could perhaps yield the best corporate social responsibility impact on business.
However, in order for buyers to support the companies they perceive as socially impactful and aligned with their values, they must be aware of a company’s social impact and values. Communication and marketing are crucial. Consumers don’t want to hunt for information, they expect companies to report on their CSR efforts and results in a way that is easily discoverable, transparent and simple to understand.
It is clear education-concerned consumers are high-value customers. Investing in attracting these customers via education efforts can pay off for companies in the form of increased engagement and ongoing loyalty. Additionally, communicating out the success of education-focused programs can lead to greater brand awareness and business.