Corporate responsibility, also known as corporate social responsibility (CSR), has become a buzzword in recent years. What is it exactly? When a business contributes to goals associated with social activism, it is embracing corporate responsibility. This includes paying attention to how business practices impact marginalized groups, the environment, and society as a whole. Incentivizing volunteer work for employees, setting up charitable funds, and revising ethical guidelines to go above and beyond also play a part in CSR. Why is corporate responsibility important? Here are 10 reasons why:
#1. It encourages customer loyalty
People are giving to charitable organizations in high numbers. Millennials are especially active. To attract customers and keep their loyalty, corporations need to pay attention to what customers care about. If a customer feels like they are living out their values by supporting a certain business, they are more likely to stick with the brand. They’ll feel a sense of pride when buying from the business and are more likely to recommend it. Loyal customers are the best marketing a company can get.
#2. It gives businesses a competitive edge
Customers care about a business’s part in social issues and they will be loyal to corporations they believe align with their values. That means corporations that cater to these customers have a competitive edge over companies that don’t. They might offer the same products and services, but the fact that they are making corporate responsibility a priority makes them more appealing. Drawing that distinction is essential for marketing purposes.
#3. Corporate responsibility makes employees happier and more fulfilled
Research shows that employees of businesses that prioritize CSR are happier and more fulfilled. 80% of employees report feeling more purpose when they believe their work makes a difference in the world. That sense of purpose is essential to employee loyalty and dedication. When personally fulfilled, people are less vulnerable to fatigue and stress. They’re also more likely to stay with the company.
#4. It makes a business more sustainable
When a corporation decides to make corporate responsibility a focus, it needs to be more innovative and creative. It can’t be “business as usual.” Nurturing innovation and creativity forces a company to stay relevant and adjust according to what customers want. These days and for the foreseeable future, customers want social responsibility. The ability to adapt is important for longevity and sustainability.
#5. Customers are willing to pay more
Corporate responsibility is great for business in a few ways. One of them is that companies can charge more for their products and services. A Nielsen Global Survey of Corporate Social Responsibility revealed that more than half of the surveyed customers are willing to pay more if the company is committed to corporate responsibility.
#6. It attracts more investors
Investors care about a business’s sustainability, customer loyalty, and competitiveness. There are also many eager to support companies that work to make the world better. Corporations that commit to social change and are willing to adapt are very attractive to investors. Incorporating CSR is an effective way to attract socially-minded investors as well as those thinking about long-term financial success.
#7. Corporate responsibility attracts more employees
The generations that really care about social justice and social change will make up the majority of the workforce. 66% of people surveyed in the Nielsen Global Survey of Corporate Social Responsibility prefer to work for companies that prioritize corporate responsibility. By embracing that, a corporation can attract the best employees and keep them, making the business stronger.
#8. Corporate responsibility can reduce costs
Making money has been the primary goal of “business as usual,” but corporate responsibility doesn’t mean a company sacrifices profits. In fact, it can reduce costs. Since General Mills installed an energy monitoring system, they’ve saved millions of dollars each year. While equipment can cost a company initially, it saves money in the long-term. When reduced costs and higher-priced products are combined, companies can make a very good profit by being socially responsible.
#9. Corporate responsibility opens up new opportunities/markets
There are a lot of markets that haven’t been tapped into because traditional business thinking doesn’t see them as “profitable.” With social activism on the brain, corporations can open new doors into neglected areas and causes. In considering social impact as well as profit, corporations can find a balance and set themselves apart from the crowd. Consumers will appreciate that a corporation is thinking about where it can help and not only about profits.
#10. Corporate responsibility makes the world a better place
Businesses, especially big corporations, can change society in significant ways. They have a lot of influence, so they can not only raise awareness of issues, they can play an essential role in progress. Addressing climate change is a prime example of where corporations can take charge. By taking responsibility for their impact, corporations can help the world become a healthier, happier place.