Every business exists to make money: from a small corner shop to a large corporation, profit is the end goal of any business.
However, a sustainable business goes beyond that. A company that wants to secure its existence, rival competition, and sustain innovation and growth goes beyond the mere goal of making profit. If a company wants to have an impact on society and make a difference, it has to engage in corporate social responsibility.
In recent years, corporate social responsibility has gained ground and is no longer a novel idea or a burden that companies must carry in order to appear that they are giving something back to society.
Also, while corporate social responsibility used to be seen as a reactive action in order to control damage or make good for a mistake, nowadays it is acknowledged that these initiatives are important to build trust, engage the community and employees, and access new markets in a responsible manner.
Moreover, corporate social responsibility is not just a singular initiative such as giving money to charity or asking employees to do their bit for the environment and not print e-mails. Rather, corporate social responsibility is a holistic approach and should be at the core of a business’s daily operations and a guide to its future progress. In fact, when choosing what corporate social responsibility action to take, a company should choose one that is of interest and aligns to its business objectives.
Corporate social responsibility has an impact on the business itself, on its employees as well as on society
No business operates in isolation: every business engages with employees, stakeholders, customers, suppliers, and society in general. Corporate social responsibility is a means to manage these relationships to achieve a positive impact, while still managing to make a profit.
Corporate social responsibility is beneficial for both the company as well as its customers and society in general. Corporate social responsibility is recognised as the means to gain access to capital, strengthen customer relationships and closely engage with employees.
In the US, corporate social responsibility is a permanent element in more than 70 per cent of companies. And in the EU, there is a very clear strategy. The European Commission, which defines corporate social responsibility as companies taking responsibility for their impact on society, believes that any business’s financial success should be complemented by its record on social responsibility, corporate ethics and environmental stewardship. For the Commission, businesses can engage in corporate social responsibility by following the law and integrating social, environmental, ethical, consumer and human rights concerns into their business strategy and operations.
Corporate social responsibility has an impact on the business itself, on its employees as well as on society.
It may sound cynical but the reality is that successful corporate social responsibility needs to be integrated in a company’s business objectives. Corporate social responsibility is not an overhead – it is a business decision because it will impact how a company will reach its objectives and targets, how its stakeholders and customers view it, and what new products and services a company will develop and launch. For instance, consider a company that sources coffee. By sourcing fair trade or ethically grown coffee, the company is projecting a certain image, attracting and winning over a specific customer, inspiring other companies to follow suit, contributing towards a sustainable economic system, and having an impact on society.
Corporate social responsibility also has an effect on customers. The relationship between a business and its existing and potential customers is based on trust. By being responsible, ethical, transparent and caring, a business shows that it offers honest services and products. Trust encourages loyalty and therefore corporate social responsibility becomes a valuable tool in attracting repeat custom.
Nowadays, a lot of employees are after more than just a good salary. They want to work for a company that shares their values and gives meaning to their eight-hour grind. Moreover, they want to work in a caring environment that not only inspires them in their career and incubates their ideas but also fulfils society’s expectations. Through corporate social responsibility, a company can inspire its employees while attracting and retaining talent.
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