CSR has been a buzzword in the business world for quite some time now. But what do you mean by CSR exactly? It is nothing but how a business gives back to society and the environment.
Although it is not a legal mandate, it is considered extremely important for a company to be socially responsible and address environmental and social issues. Several companies and businesses are engaged in teamwork activities encouraging CSR initiatives like helping amputees with a prosthetic hand, blood donation drives, plantation drives, etc. Why is CSR important for a business? Read the blog to find out.
· Customer Loyalty: Loyal customers are the foundation of any successful marketing strategy. And today’s customers, especially millennials, are very active and engaged in charitable initiatives, making it critical for companies to pay attention to what their customers care about. If a customer feels that a business supports what they value, it is more likely that they will stick to that particular brand.
· Competitive edge: People generally prefer companies that make corporate social responsibility a priority. Hence, being a socially responsible company gives businesses a competitive edge over their customers. Customers love to write about their experiences with their favorite brands – and CSR initiatives can get companies hundreds of shoutouts from people on social media. Giving back to society attracts millennials – and thus, having an effective CSR strategy in place helps businesses create increased brand awareness and recognition.
· Sustainability: CSR initiatives require businesses to be innovative and come up with creative ideas. This fosters creativity, sustainability, and innovation amongst employees, forcing businesses to stay updated with what customers want and expect. Furthermore, customers are generally willing to pay more if they know the company they are buying from is a socially responsible business.
· Happy and more engaged employees: A company that prioritizes CSR generally has happier and more content employees. When employees feel what they are doing has the ability to make a difference in society, they feel a sense of loyalty and dedication towards their company. It creates an environment of positivity at the workplace and nurtures productivity and growth.
Different types of CSR activities
There are majorly four types of CSR activities:
· Environmental Responsibility: For socially responsible companies, the priority is primarily to engage in environmentally friendly practices. Companies take ownership of the positive impact on the environment by making conscious efforts and engaging in initiatives that help in reducing carbon footprint, pollution, and waste by using alternate energy sources.
· Ethical Responsibility: Treating all people, be they cleaners, stakeholders, management, or customers, equally and fairly is what ethical responsibility essentially means. Companies should ensure that companies do not act based on pre-conceived stereotypes and notions and create a positive environment of respect and trust to be called ethically responsible.
Some of the most common examples of ethically responsible initiatives by businesses are setting a minimum wage, guaranteeing all the materials are sourced ethically, and ensuring that all the employees get benefits and bonuses based on merit.
· Economic Responsibility: Making financial decisions that are not just good for your own business but also sustainable for others is what economic responsibility is. One example could be signing a contract with a vendor that supplies organic and sustainable materials even if they charge more. Another example could be bridging the gaps between the employees and paying everyone equally based on their designation.
· Philanthropic Responsibility: When businesses donate to organizations and communities that align with their mission and core values, they are said to be philanthropically responsible. This could be as little as organizing a blood donation drive or sponsoring a fundraiser event for an NGO, or as significant as donating some of your company’s annual revenue for a noble cause.