Practicing Corporate Social Responsibility (CSR) is neither a marketing tool nor a legal requirement for businesses. However showing commitment to supporting a cause can have an impact on how a brand is perceived and its values by its stakeholders especially customers and the media. Corporate Social Responsibility is not something businesses and marketers may want to neglect but in fact make that an integral part of what the brand/business stands for.
Why It Matters
There may still be ambiguities surrounding CSR efforts – differentiating what CSR is and means and what it is actually not. Well, for one thing, we have to weed out the notion that it is another marketing tactic or PR spin. Secondly, CSR is not a reactive response to cover up a brand reputation in crisis. And third, CSR is not a disguise for gaining media exposure.
So, what are the main points behind the concept of Corporate Social Responsibility?
CSR is a mindset, as well as cultural (corporate) and proactive in nature.
CSR is about creating a corporate environment which is based on strong values—accountability, transparency and sustainability. Having a unifying mindset is the core through which it is translated into different CSR campaigns and programmes that benefit society and the environment as a whole. Specifically, CSR can include the following practices:
- Sourcing or manufacturing environment-friendly materials
- Maintaining good labour practices
- Efforts to use energy and water efficiently
- Effective waste management systems and reduction of (GHG) greenhouse gas emissions
- Community engagement: volunteering/sponsoring local events, hiring employees locally, adhering to local fair trade practices
Not all companies have CSR integrated into their business model. Some companies practically do not feel the need to, because aside from not being required by law, it strips away part of their financial or material resources. Moreover, some just don’t organically see that it’s an altruistic call for social and environmental sustainability. However, by ignoring Corporate Social Responsibility, what they don’t realise is that they could be doing more harm than good.
In Singapore, although companies have proven themselves to be highly progressive and advanced, they still have a way to go in terms of CSR. From 835 listed companies in the Singapore Exchange, there are only 30 entities who have submitted CSR reports. Global Compact Network Singapore, an agency advocating CSR and sustainability, reported more than 900 firms as members supporting the global initiative.
We at ENCE Marketing believe that every business has the potential to find ways to engage with their customers while doing what is right for sustainability in our society and environment.
We give you the reasons why businesses and marketers need to start paying attention to CSR:
You connect at a ‘deeper’ level with your target market.
CSR is the perfect opportunity for brands to communicate and collaborate more with their existing and potential consumers. Collaborative activities are a great way for the company to display a ‘human touch’ element and be a concrete example of their core corporate values or vision.
It develops better products and services.
Having Corporate Social Responsibility integrated into your business model is like having a blueprint for how the company can evolve. The culture of ethical practices, accountability, social awareness and environmental sustainability that is embedded in the company’s core values allows us to identify the present issues and problems of the society. This encourages more efforts in research that lead the company towards developing more high-quality and environmentally-friendly products, services and more advanced technology that will really add value for their target market. Remember, more useful products equal more opportunities for business and growth.
Moreover certain internal innovations—such as technologies for energy and water-use efficiency, using recyclable packaging materials and effective waste management—can also help in cutting down operational and logistics costs.
It drives sales up.
What CSR is should not be directly associated with the primary goal of driving profitability. Instead, it is just a side-effect of the company’s efforts. According to Nielsen Global CSR report, 66% of consumers are willing to pay more products from socially responsible companies; therefore consumer brands that aren’t practicing CSR are ‘outperformed’ by those who do.
Moreover, aside from comparing the brands’ price tags, consumers are also checking the manufacturing labels or whether a brand promotes responsible business practices. Solid brands who know better grab this opportunity to be differentiated from others.
It encourages employee engagement and investor trust.
Consumers are not the only ones who can benefit from developing accountable, transparent and sustainable corporate practices, but the other stakeholders of the organization—the employees and investors as well. Employees and investors exhibit more enthusiasm and trust in a positive corporate environment that upholds integrity and transparency.
It’s a ‘Win-Win’ business model.
Aside from taking it as a means of proactive reputation management, CSR campaigns are a great way to match the efforts of the government and international community to address the most pressing environmental and social issues we face today—such as geopolitical, environmental and socioeconomic instability, which definitely pose risks to the business landscape.
But for those businesses that label themselves as SMEs—in which resources for CSR efforts might be small, if not nonexistent—should they still jump on the bandwagon with the big boys?
While the CSR efforts are mostly associated with huge, high-profile companies, we must remember that CSR practices are not limited to allocating big bucks for community engagements, ‘greenwashing’ activities or writing cheques for charities. It covers all the efforts towards strengthening corporate or organizational core values that are ethical and sustainable, for the benefit of not only their target consumers, but for their employees, partners and other stakeholders. Therefore, even small organizations and brands must give CSR a go.
Does your company practice CSR? If so, share with us in the comment section below, or if your company has yet to participate in this initiative, why not start NOW? We at ENCE Marketing Group bank on tried and tested approaches that help companies execute appropriate CSR activities for optimal results. Feel free to get in touch with us, we have some great ideas on how you can engage in CSR!