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Can corporate social responsibility help your bottom line?

The term Corporate Social Responsibility or CSR first surfaced in the 1990’s. It encompasses a company’s efforts to impact society and the environment positively. In some cases, CSR is mandated. For example, in California there are regulations on large retail and manufacturing firms such as the California Transparency in Supply Chains Act of 2010. It requires “US firms based in California to disclose, at minimum level, efforts to eradicate slavery and human trafficking from their supply chains on an annual basis.” 1

Beyond meeting state regulations, CSR can also strongly benefit companies by lifting morale and boosting the company's brand. The latter is especially important among millennials. These consumers prefer to put their dollars on products that meet their values. For example, a company may appeal to the tastes of these groups through activism that is rewarded through increased engagement and visibility in social media. However, CSR may be a double-edged sword. As much as millennials expect companies to be good corporate citizens, they can also detect when a company is inauthentic in a supposedly socially beneficial endeavor and may even call it out publicly for doing so. That is why it is important to find CSR initiatives that are tied to the company's core values and activities.

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“Researchers found that corporate responsibility could potentially increase the market value of a company by up to 6% over a 15- year period“ 2

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Companies that get CSR right

Some companies do better than others at CSR efforts that resonate with their audience. Starbucks has successfully integrated CSR organically with Coffee Communities. Through its Farmer Support Centers in key coffee producing countries around the world such as Costa Rica and China. Starbucks provides farmers with access to advanced soil management techniques as well as share information on the most recent findings regarding sustainability from top agronomists. They have also donated more than 30 million trees to coffee farmers over the years.

Another company who has had a social mission from the get-go is TOMS, which donates a pair of shoes to a child in need for every pair of shoes a customer purchases. Their “buy one, give one” model has been so effective that other successful companies such as Warby Parker have emulated its take on CSR. The uniqueness of TOMS’ shoes makes it easy for those who purchase them to be noticed not only for good taste but for also for caring about social issues.

Getting everyone on board with CSR in your company

The first step of cause-marketing is finding a cause that is related to your company's core values. Just like in any project, you must be able to manage and measure social impact with clear key performance indicators related to your goals. For example, if your goal is building awareness to your brand you can measure social impact through recruiting volunteers, gaining followers to your site, and the number of shares on the issue in social media.

It’s important that employees are informed of the CSR strategy and able to clearly communicate to the public what the company is committed to accomplish. Employees that feel pride in such goals become your best ambassadors to the outside world. This in turn attracts loyal customers who connect to this aspect of the brand’s story. There are different approaches to build this employee commitment. While some companies create a plan for volunteering with specific events in mind, others encourage employees to take ownership over their service to the community by allowing 2 days paid for volunteering for employees to choose.

Public perception of a company is crucial to its success. Corporate social responsibility is not the sole domain of large companies. Small business can also champion a cause. As a startup, you might even be able to recruit better and more socially conscientious employees by including information about your CSR in handouts distributed at recruiting fairs.

[1] What is corporate social responsibility – and does it work?/The Conversation

[2] How Corporate Responsibility Can Deliver ROI/Inc.

Incentive Management Inc.
Ariel University Center of Samaria Upper Campus, Building 10 
+972 (0)3 908 5000
+972 (0)3 936 6873
Incentive, Peregrine Ventures Incubator 

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