Corporate social responsibility (CSR) is an organisation’s initiatives to evaluate and be responsible for how the organisation affects the environment and the social well beings of their stakeholders. The efforts taken by companies are usually more than what is required by environmental groups and regulations. Companies engage in CSR for different reasons, some companies do it to achieve their environmental and social goals while others try to achieve their financial goals while minimising the negative social and environmental impact.
Industrial companies such as chemical engineering and mining, can have bad effects on the environment. This allows many companies to take CSR as an approach to show consumers that they are doing their best to conserve the environment. There are different activities in which companies can take to engage with CSR, such as working with local charities and communities, environmental sustainability, and developing relationships with their own employees and customers.
So, why is CSR important? Right now, with the use of technology, the demand for businesses to be open about their business activities has increased. This is important to many big organisations such as Coca Cola and McDonald’s, where their business flourish directly from customers, to be socially responsible or else they would risk losing these customers to their competitors. Would you still purchase products from a company with the worst environmental and social impacts? I know I wouldn’t.
According to the second annual Corporate Responsibility Survey in 2016, 83% of professional investors are more inclined to purchasing stocks from companies that are socially responsible. Why is that so? Well, that is easy. They prefer to purchase stocks with companies that are honest and transparent about their business activities, lowering the risk of them losing their money.
This makes CSR even more important to companies, and hence, many companies have made CSR the core of their organisation. According to the 19th Annual Global CEO Survey, 64% of CEOs say that CSR is core to the business and no longer just a standalone activity.
The benefits of CSR is much more than just doing good to the society/environment and appeal to customers, but it would also help in cutting costs and increase engagement with employees and customers as well. For example, many Fortune 500 companies have announced goals to use clean energy. This would not only help them cut cost, as they will be using renewable energy, but it would help them in their CSR initiatives as well. Based on a report done by World Wildlife Foundation (WWF) in 2017, $3.7 billion was saved in 2016 alone by 190 Fortune 500 companies through their 80,000 emission-reducing projects.
CSR has become an important part in an organisation. Gone are the days where people purchase products without doing their own research about the company. With CSR, companies will be able to do their part to conserve the environment, cut costs and obviously, attract customers to buy from them instead of their competitors.