Why CSR Matters for Businesses

What is CSR?

Corporate responsibility is more than just a buzzword these days. Customers, employees, and stakeholders want businesses to increase their Corporate Social Responsibility (CSR) to better impact the environment, workers, and communities. CSR means focussing on the 'triple bottom line' approach by balancing the economic, environmental, and social needs of a business. A big part of this is sustainability, but can also include working conditions, governance, and more.

Embracing CSR, though, doesn’t mean greenwashing or empty words. While these ideas may help your business in the short term, ultimately, they are more damaging and make it hard for customers and investors to trust your business.

Instead, incorporating CSR into your business model means taking real steps to:

• improve processes and design to minimise waste;
• decrease reliance on earth- and human-harming chemicals and fossil fuels;
• and provide safe, secure, and opportunity-rich working environments for employees.

The Benefits of CSR

While working toward better CSR goals is great for the planet and people, it also has tangible benefits for the company, which can help make it easier to get leadership onboard. It's hard to understate the benefits of embracing CSR as a company. Not only can it increase brand reputation, but it can also help your bottom line and make you more attractive to investors. So let’s take a look at eight major benefits of strong CSR goals for businesses.

1. Better Brand Value and Visibility

With climate change issues and worker rights regularly making the headline news, it’s apparent that future-proofing our world is more important than ever. By branding yourself as an environmentally responsible and ethical leader in your industry, you’ll position yourself well in the eyes of stakeholders and consumers. It can help you gain positive publicity, and even give you a competitive advantage against your competitors.

2. Being an Industry Innovator

As the world searches for areas in which we can improve, mitigate, or even roll back the damages done by climate change, businesses that have a pulse on sustainability ideas will be better placed to promote innovative solutions in both the B2B and B2C spaces. If sustainability is already part of your brand identity, it only makes sense that your products would be designed in ways that do good in the world, instead of hindering it. By embracing sustainability now, you’ll be poised to market yourself and your products as solutions, rather than future problems.

3. Mitigating Future Risks

Stakeholders and investors like certainty. Businesses that use CSR to leverage themselves and their brands will find themselves in a better position to mitigate risks and pitfalls in an uncertain environment. It requires long-term strategy vs. short-term thinking, but can pay dividends in the end. For example, sourcing and manufacturing locally would be more sustainable and allow for greater transparency around working conditions, plus it would minimise risks to supply chain disruptions that are out of your control, such as issues in other countries or shipping backlogs.

4. Satisfying Consumer Demands

A 2021 IBM survey found that 84% of consumers believe that corporate responsibility is moderately important when making purchasing decisions, while roughly 40% said it was more important than cost and convenience. Consumers vote with their feet, and as more people embrace sustainability in their own lives, they are seeking out brands that align with their values. If you aren’t already heading towards sustainability, you might find yourself left behind in a changing world.

5. Ensuring Environmental Regulatory Compliance

For decades, regulators worldwide have introduced legislation to curb pollution, emissions, and the use of toxic materials in products. But as we inch closer to net-zero goals, policymakers are continually introducing further legislation to ensure businesses aren’t harming the environment or communities around them. By embracing sustainability now, you’ll be prepared for any further legislation as it relates to your industry, to ensure you’re always compliant.

6. Improve the Bottom Line

With an increased awareness of corporate responsibility, businesses can implement processes and tools to enact better outcomes for their bottom line. Introducing recycled materials into products, improving procurement processes, or making your office zero waste can all increase efficiency. These help ensure wasteful spending, out-of-date processes, and bad designs are mitigated, which in turn can help your business’s bottom line.

7. Better Talent Recruitment and Retention

Similar to consumers of your products, employees also value companies that have strong social and environmental values. According to a 2016 survey, nearly 60% of employees consider the CSR of a company when choosing to accept a role. If you position yourself as a responsible leader, you’ll not only have a higher chance of passionate applicants, but they’ll be likely to stick around longer – 70% were more loyal to these types of companies, according to the same study.

8. Gaining Certifications to Make Your Business Stand Out

A huge benefit that comes with robust CSR within a business is the ability to apply for ethical business certifications, which serve to benefit your company better. Certifications and accreditations such as B Corp, 1% for the Planet, Rainforest Alliance, or Cradle-to-Cradle, amongst others. These certifications help distinguish your business further and can amplify your brand and values, while also verifying your claims through a third party.

Making it Happen

Becoming a sustainable business won’t happen overnight, but with dedicated leadership and high-impact changes, CSR can become a focus within your business. For businesses that are just starting on the sustainability journey, it’s best to find small goals to focus on and grow them as you go. For instance, you could start by focussing on setting waste goals, improving transparency in manufacturing, or embracing the circular economy.

No matter how your business approaches CSR, or why, make sure you measure, report, and share wins with your stakeholders, customers, and internal teams.