Before corporate social responsibility (CSR) became a must-have due to customer and employee demands, companies focused on maximizing profits on every initiative they pursued. Today, that's no longer the case, as companies have more responsibilities than just making a profit. They are responsible for doing right by their shareholders and society at large.
Many company executives believe that CSR is only relevant to large corporations. However, CSR activities can greatly benefit small and medium-sized enterprises (SMEs) too. Businesses of all shapes and sizes should implement alternative growth strategies to stay competitive — one of the most effective strategies is corporate social responsibility (CSR).
What is CSR?
CSR is a type of business self-regulation that companies put into action with the aim of social accountability and improving society. It ensures that a company's operations are ethical and beneficial to the community. Companies can embrace CSR by prioritizing environmentally friendly business practices and promoting diversity, equity, and inclusion (DEI). CSR helps companies create awareness around their impact on society, the communities in which they do business, and the environment. Companies that demonstrate good corporate citizenship improve their public relations and brand image.
The benefits of CSR for SMEs
Why should SMEs implement CSR strategies? Because socially responsible businesses perform better than their competition, attract loyal customers, and keep their employees engaged at work. Small and mid-sized companies can use CSR to align their brand with relevant social causes and issues that matter to their stakeholders. Here are a few ways CSR can benefit your SME:
- Competitive advantage: CSR initiatives can significantly improve your company's public image by positioning it favorably in the eyes of consumers, regulators, and investors. Business Wire research shows that consumers expect the brands they support to be socially responsible. 70% of consumers want to know what the brands they support are doing to address social and environmental issues. Therefore, implementing CSR initiatives gives your company a competitive advantage. You'll gain a steady revenue stream, loyal customers, business partnerships, and new investments.
- Employee recruitment and retention: CSR practices make it easier for your business to recruit new talent and retain employees by improving employee engagement and satisfaction. Employees are more likely to stay when they share your company's values and can relate to your CSR initiatives. Keeping employees engaged and motivated reduces the cost and rate of employee turnover. In today's business climate, your employees must feel they are working for a company that is accountable to the community and the planet.
- Greener company footprint: Companies significantly contribute to pollution, waste, greenhouse gas emissions, and natural resource depletion. By implementing a CSR program, your company can work towards conducting business in more sustainable and environmentally friendly ways. For most companies, this can include switching to alternative energy sources, opting to use recycled materials, and providing employees opportunities to volunteer for environment-focused organizations. Reducing your impact on the planet and addressing the issue of climate change can make your company, products, and services more desirable to conscious consumers.
- Customer acquisition and loyalty: Your company's ability to attract and build a loyal customer base is vital to its future and growth. Customers have become more selective about their purchases, so meeting their needs and expectations is essential to winning their business. 75% of consumers are likely to start shopping at a company that supports an issue they care about. CSR allows you to build consumer trust and brand reputation by showing customers that you share their values and that their dollars contribute to the greater good.
Tips for starting a CSR program
An effective CSR program will positively impact sales, employee motivation, and brand positioning. You will gain long-term benefits from corporate social responsibility initiatives that authentically represent your company's purpose and values. Here are a few tips for implementing an effective CSR program in your company:
- Start small and build each year: Start by setting clear and achievable goals around your company's core values, then ask for feedback from your customers, employees, and stakeholders. After assessing your internal capacity for implementing CSR initiatives, identify one primary idea to focus on, then formulate a plan to execute. After implementing your first program, evaluate its effectiveness by measuring and reporting on social impact, employee engagement, return on investment (ROI), and more. Assess the program's outcomes and apply the insights you have gained to your next idea and program.
- Create a position or department for CSR: You can restructure your company to include a CSR department that works closely with the human resources (HR) department. Your CSR department should focus on environmental issues and supporting social causes. Hire someone new or promote an employee to act as your CSR coordinator. Their role will be to develop strategies that deepen relationships between your business and the community and highlight your company's commitment to sustainable business and social impact.
- Prioritize DEI: Diversity, equity, and inclusion (DEI) are crucial components of a CSR program. Incorporating DEI into CSR initiatives will reinforce your company's positive brand image and enhance engagement from communities that share your values. DEI also improves employee morale by deepening their sense of belonging in the workplace.
- Create employee resource groups: Employee resource groups (ERGs) are voluntary, employee-led groups of colleagues who come together in the workplace based on shared interests, issues, or backgrounds. Creating ERGs can develop a greater sense of community within your company. Empower your ERGs by providing them opportunities to support the causes that matter to them.
- Use a CSR platform: Technology can help you implement and manage CSR initiatives in innovative and engaging ways. With a CSR platform, all relevant stakeholders can participate in various opportunities in a single place. A tech platform also has relevant frameworks that can help you measure and report on the impact of your CSR initiatives and campaigns.
Creating a CSR program doesn’t have to be overwhelming. If you’re not sure where to start, don't hesitate to reach out. We are happy to help you develop a comprehensive strategy and implementation plan that will resonate with your stakeholders, company culture, and values.