Can Corporate Social Responsibility Be Profitable?
Corporate social responsibility, aka “CSR”, is simply business-speak for practices that benefit society and the environment. It’s something we’ve written about before on the Intelligent Office blog, but can doing the right thing really help your business make more money?
When it comes to your small business, the answer likely isn’t black and white. But, if you’d like to learn more about CSR and what it could do for your business, keep reading.
Linking CSR initiatives directly to profits is incredibly difficult
First, it’s important to remember that identifying a direct link to CSR and profits is tough. Researchers have been studying the links between CSR and revenue for years.
In this article about CSR posted on Business Ethics, the writer dives deep into existing research that’s been done on how CSR impacts a company’s profits. Read the article to learn more about the details, but consider this excerpt when thinking about how your business might approach its social and environmental efforts:
“On balance, surveys and the research literature suggest that what most executives believe intuitively, that CSR can improve profits, is possible. And almost no large public company today would want to be seen unengaged in CSR. That is clear admission of how important CSR might be to their bottom line, no matter how difficult it may be to define CSR and link it to profits.”
Even if your company is small or medium-sized, many consumers and employees still want to associate with companies that are dedicated to protecting our planet and its people.
Will consumers pay more for socially-minded goods and services?
On the consumer side, a 2014 study from Nielson found that 55% of global online consumers from 60 countries are willing to pay more for products and services from companies who are, “committed to positive social and environmental impact.”
If you want your business to stand out in a crowded marketplace, being socially responsible is one way to earn attention... and brand loyalty, hopefully.
However, that doesn’t mean you can throw a volunteer program together haphazardly and reap the benefits. In fact, the intent of a company’s social responsibility efforts matter more than some business owners initially realize.
Where CSR is concerned, intentions matter to employees
In the Harvard Business Review article, Stop Talking About How CSR Helps Your Bottom Line, the writers explain the results of an informal study they conducted with an Italian firm. The results suggested that, “employees care about the intentions behind companies’ CSR activities, not just the positive impact those activities have on society. We found that when CSR was made strategically ... respondents rated the firm as less attractive, viewed the firm as less socially responsible.”
Simply put, if your CSR initiatives aren’t a genuine part of the company’s culture, employees will notice the disconnect. It’s not enough to cobble a program together because you want some good press — you should choose causes that resonate with the business’s mission and purpose.
If you aren’t sure what the company’s mission is, consider Reviewing Your Mission Statement to find more clarity.