When people say CSR they think about philanthropy or doing charity services. There is a big confusion about this concept and there is a misconception surrounding it. CSR is not all about altruism and doing humanitarian actions on behalf of the firm for the society. CSR is an approach for companies to benefit themselves while also benefiting the community.
So what are the reasons why companies should embrace Corporate Social Responsibility?
Here are some business reasons that explain why.
Corporate Social Responsibility is a huge advantage to companies and communities. According to Geoff McDonald, Unilever Global VP for HR, Marketing, Communications and Sustainability, using the “lens of sustainability”, Unilever was able to create new products like a hair conditioner that uses less water. Embracing the concept of sustainability, the company could lead to such a product.
Under sustainability also, companies are able to reduce their costs by reducing for instance their packaging, thus their energy. For example, General Mills is on its way to reduce its energy savings by 20% by 2015 after installing energy monitoring meters on many pieces of equipment.
For the past decades, brand differentiation was one of the main reasons companies adopted CSR. The importance of a brand is usually to distinguish itself from competition and point out the brand recognition for consumers and customers. Today, brand differentiation is very important because product distinctions are getting hard to detect. Consequently, companies have to find a differentiating factor to distinguish the brand by providing it with extra characteristic. Through integrating their social activities into their brand, companies will be influencing the buying decisions of potential customers. By arousing emotional feelings through integrating CSR initiatives on a product brand, companies are able to facilitate brand differentiation and lead to a better reputation.
Companies embracing CSR are able to engage with their customers in many different ways. Since the message is about something “good”, companies can easily reach their customers. For instance, for the past few years Walmart became a leader in environmentalism. In fact, in 2008, it ran an ad campaign to raise awareness about the environment and the choice of products consumers could make consequently.
What is the point of doing CSR in your company if you own employees don’t know what is going on within your organization? For example, the company “Sara Lee” built up a cross-functional, global Sustainability Working Team to help setting a strategy for sustainability. Moreover, the Solo Cup Company formed the Sustainability Action Network to stimulate employees to work in community service focused on the company’s CSR priorities.
The above reasons are not the only ones why companies should adopt CSR. In fact, each company has its own way to become involved in CSR.
CSR is not the solution to the world’s problems. But it certainly helps moving forward the economy alongside the environment and society.