The Business Case
We continue our series to help you justify CSR programs. This part focuses on the cold hard business case. (Our previous entries spoke about wicked problems, CSR business trends, ethical issues, and risks of not adopting CSR. We also presented the case for becoming a For Profit Social Enterprise or FOPSE. And, we pointed out that CSR is not about exploiting untapped markets.)
Recruiting and Retaining Talent
It is no surprise that a 2007 Globescan report found that over 90% of employees were more motivated when working for companies with CSR programs. The latest generation of workers seem less motivated by money – “making a quick buck”, than previous generations. There is a new spirit of combining “doing well with doing good”.
There is insufficient data to prove that companies that are socially responsible generate more profit or more net worth than companies that are not. Yet, many believe that CSR improves company reputation and improves revenue:
- IPSOS Reid poll in Canada found that many consumers pay attention to CSR programs
- Edelman Trust Barometer linked CSR factors to company reputation
- Economist Intelligence Unit found that having a better brand reputation was the most important benefit of CSR programs
- The Conference Board of Canada suggests that CSR programs can improve efficiencies and spur innovation
There is a significant difference in results among industries. The Edelman Trust Barometer found that some industries enjoy better reputations than others. It is clear that many CSR programs appear to be marketing campaigns more than core social responsibility. Some companies are deeply involved in industries that generate pollution, exploit workers in emerging countries or leverage shady financial instruments. It is difficult to trust these companies, so the uptake of CSR programs to generate more business is limited. It should be noted that many companies have turned the corner finding green energy, improving plight of workers world-wide and making financing more accessible.
CSR is a clear business trend. There remains skepticism that these programs can result in improved profitability. That’s because CSR is in an early adopter stage. The momentum is there. And the statistics are beginning to prove the value of CSR programs. We caution the reader to recognize that there is a difference between truly being CSR and generating a marketing campaign. Your customers can tell the difference. And, the blogosphere will find out if your program is superficial.