Corporate Social Responsibility

How CSR & ESG creates value for companies

Generating ROI through social impact and responsible business practices

Many executives believe that corporate social responsibility (CSR) and environmental, social, and governance (ESG) initiatives are only for large companies. But companies of every size should be investing in CSR and ESG to create value.

CSR qualitatively holds your company accountable for its impact on society. ESG helps measure the results of socially and environmentally responsible practices, programs, and policies. CSR and ESG propositions are essential to creating short and long-term growth in business.

What is CSR? 

Also known as corporate citizenship, CSR is a self-regulating business model that keeps companies accountable to the public, their stakeholders, and themselves. By practicing CSR, businesses become conscious of the social, economic, and environmental impact they have on the world.

What is ESG? 

ESG describes areas that characterize an ethical, responsible, or sustainable investment. Businesses are considering ESG and acting on it by implementing internal changes. It is no wonder that investments in global sustainability have topped $30 trillion.

Governments and consumers have grown more aware of the impact companies have on society and the environment, accelerating the need for ESG. Executives and investors have also discovered that ESG and CSR are critical differentiators and determine a company's potential to succeed.

5 ways CSR & ESG can create value for your company 

1. Facilitation of top-line growth

CSR and ESG propositions help companies expand into existing markets and venture into new ones. When a governing authority has faith in your company's reputation, they are more likely to award access, approval, and licenses that enable new growth opportunities.

2. Attraction and retention of talent

Job seekers, especially younger ones, don't just look at the size of a paycheck when considering a new position. They desire to work for a company with authentic CSR and ESG goals and initiatives and accept less pay from employers that meet those standards. The trend for employees is similar — when employees evaluate how satisfied they are with their current job, they often consider how their company impacts society. Brands that protect the environment, maintain fair governance, and support human rights issues are more likely to attract the best candidates and retain their talent.

To compete in today's markets, companies define their CSR and ESG goals and implement measures that help them meet those goals. Employee engagement is one measure that is vital to attracting and retaining talent. Social responsibility initiatives, like workplace giving and volunteering, are popular ways of keeping team members engaged in the higher purpose of their company.

Demonstrating your commitment to conducting socially responsible, ethical, and sustainable business creates substantial value over time. Engaged employees are more connected, motivated, and productive at work. They are also likely to stay with your company longer, reducing employee turnover and the costs associated with recruiting and training new hires.

3. Enhanced customer loyalty

Today's customers expect a lot from the brands they do business with and have demands ranging from strong ESG practices to personalized messaging to innovative CSR programs. They want to be associated with companies that are socially and environmentally conscious. In fact, according to a study, 87% of consumers will purchase a product or service because the company advocated for an issue they care about. 73% of Americans would stop making purchases from a company that doesn't care about climate change.

As more and more consumers stand up for environmental and social issues, the more they will purchase products that align with their values. IBM research found that 70% of consumers are willing to pay a premium of 35% on average for sustainable and environmentally responsible products. Clearly, companies with CSR and ESG propositions are well-positioned for sustainable growth and market domination.

4. Improved corporate reputation

CSR and ESG strategies play a significant role in a company's reputation. Investing in CSR and ESG initiatives creates measurable brand value for all stakeholders.

But investing in CSR and ESG isn't enough — companies need to communicate their CSR and ESG objectives to the public to align perception with reality. Demonstrating corporate citizenship through purpose marketing and communications can help your company appear more trustworthy and improve your corporate reputation.

5. Investment and asset optimization

Environmentally and socially conscious investors consider ESG when screening potential investments. Besides showing accountability to investors, CSR and ESG propositions can improve investment returns by allocating capital to more promising, scalable, and sustainable opportunities. They also help companies avoid investments that won't pay off because of their long-term environmental, economic, and social impact.

Create value through social impact

CSR and ESG initiatives do more than tick the boxes of investors, employees, and consumers. Corporate citizenship and social impact make a difference not only for your company's bottom line but also for the world. By creating sustainable outcomes that enhance value and promote growth, you can strengthen the community in which your company operates and show support for important environmental and social issues.