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BFS Capital Blog

The Importance of Corporate Social Responsibility

June 20, 2017

Being “corporately socially responsible” is kind of a relative term, and while you might think recycling the soda cans in your break room is enough, your stakeholders have higher expectations.

Becoming familiar with these expectations is critical for helping you prove that your company is, in fact, exercising corporate social responsibility. But first, it helps to know why corporate social responsibility is so important (other than the obvious).

Corporate Social Responsibility and Profit

The concept of Corporate Social Responsibility (CSR) began during the industrial revolution, when factories set up entire towns outside large cities for their employees to live. So they weren’t exposed to the rough and often dangerous conditions in the city. It didn’t have a name back then, but it was the beginning of companies acting for more than pure profit.

Flash forward 150 years and CSR has become a pillar of every company’s reputation, big or small. But what makes corporate social responsibility so important? For starters, it affects your bottom line.

According to the 2015 Cone Communications/Ebiquity Global CSR study, 91% of people expect companies to do more than make a profit, and 84% say they try to purchase from socially responsible companies whenever possible. That means if your competition is going green and you’re not, you’re probably losing business.

A Flexible, Happy Workforce

Before we even talk about responsible production and community relations, being socially responsible begins with how you treat your workforce. In case you haven’t read a management article in the last decade, Millennials value flexible works schedule and work-life balance ahead of pretty much everything. While not every business can offer complete flex time, if the community sees you as a company that strives to keep its employees happy, it will see you as socially responsible. So make every effort to accommodate flexible scheduling and telecommuting when you can.

Another way to make your workforce happier is to offer a great benefits package. This involves giving your employees decent benefits relating to medical insurance, retirement benefits, and maybe even some disability insurance, life insurance, or some other type of benefit that could make their lives easier, better, happier, or less financially stressful.

Consumers Want to Know Where Things Come From

Have you noticed that we’re at the point where even airlines are advertising their food as “farm-to-tray-table”? Like somehow the plane just rolled by some fields next to the airport to pick up that iceberg salad. But all marketing jargon aside, there’s a reason they say it: People want to know their food is coming from responsible sources. Even Wal-Mart has gotten in on the action, taking a stand against stocking meat that’s been treated with antibiotics or hormones. Chipotle and Burger King have too.

It’s not enough to just offer safe food anymore. You’re expected to buy local products whenever possible, utilizing ingredients that don’t use harmful chemicals. Stocking local beer is more or less fashionable in bars now. And since these higher-quality ingredients typically make for better food and drinks, everyone is winning.

Should you take this route, be clear in your advertising. Include the fact that you get your products from local vendors in your print, radio, and television and marketing efforts. Asking the vendors that you buy from to share with their customers that you’re a client can also help you highlight how important corporate social responsibility is to you, potentially causing you to gain some of their customers as your own.

Go Green or Go Home

Once upon a time, if you were a company that thought ahead enough to recycle, you were winning civic awards for being environmentally conscious. Now, recycling is the norm, as over 80% of office waste is recyclable and people expect you to do it. But it goes beyond just sorting your trash. Nary a new building goes up that isn’t LEED (Leadership in Energy and Environmental Design) certified. And if you own a construction firm that can’t do that kind of building, you’re going to lose a lot of jobs.

Doing other things, like installing energy-saving sensors on lights, offering employees options to telecommute to save on gas, and using alternative energy sources are huge factors in showing the rest of the world that you take your corporate social responsibility seriously. As are utilizing green methods to dispose of hazardous materials, like fryer oil and auto waste.

Have a Cause

Charitable giving, regardless of economic conditions, has been on the rise over the past decade. Even after the great recession it steadily increased, and totaled $358 billion worldwide in 2014. So businesses are expected to give a little back as a way of showing that they’re socially responsible. And by “a little,” we mean cash.

Anonymous donations are great, but they don’t really show the community what you’re doing, that you’re well aware of the importance of your corporate social responsibility. Aligning yourself with a local non-profit organization, however, gives your company a charitable identity. So when your name keeps showing up at fundraisers for a specific organization, people will see you as more than a business. They’ll see you as a member of the community who’s trying to make life better with something more than profit.

Be an Active Member of the Community

Ultimately, CSR boils down to the old adage: “You get what you give.” If you just show up, open your shop, then go home, the community won’t much care about who you are or what you do. But taking the time to engage the community will keep people coming back. So beyond just giving to charity, invite people in with something free, or volunteer your time with local organizations. Support issues that will further the growth of small business in your area.

One option that will show the community that you’re exercising your corporate social responsibility is having your employees participate in fundraising for area families or causes. Get your employees excited about doing this by asking them which causes or families they’d like to help support. Make a list and do something every six months or annually, continuously showing the community that you’re willing to go a step above and actually exceed your corporate social responsibilities.

Be Proactive with Your Corporate Social Responsibility

Of course, this is not the whole gamut of corporate social responsibility. Your stakeholders’ expectations will change all the time. Today, you must do more than just avoid dumping toxic sludge into the local swimming hole to be responsible. You have to be proactive about it, and show the world you care about more than just making money. In the process of doing so, you’ll be surprised how much your cash flow improves.