Is CSR for your company? The answer is probably yes, but you might not know it. Corporate social responsibility (CSR) is the philosophy of a business that looks beyond its bottom line, and considers its impact on society and the environment. Companies that practice CSR are committed to creating positive results in their communities and the world.
Research has found a link between companies with strong CSR practices and higher levels of employee engagement than those without them. There is also evidence that consumers will purchase more from brands with values aligned to their own, with 90% of consumers worldwide saying that they will switch to a brand which promotes a good cause. This shows how more positively consumers perceive companies with good CSR practices.
But truthfully, CSR and its benefits aren’t a new concept. In the Southeast Asia region, the formation of CSR overseeing political bodies such as the ASEAN CSR Network also signals a shift into a more corporate-conscious initiative to drive social change. What’s foreign, perhaps, is the drive to introduce CSR initiatives by small and medium enterprises in Southeast Asia. With limited resources and costs, are there any reasons for these businesses to include CSR practices? Let’s explore.
What is CSR?
So what is CSR? It stands for corporate social responsibility, and it’s an organisation’s commitment to using its power and resources for the greater good of society. It can include donating time or money to charity or working with local communities to improve their quality of life.
CSR practices, therefore, can extend to many different areas. Whether it’s environmentally friendly practices such as using sustainable materials, or funding charities that provide free education, the type of CSR practice a company implements is usually aligned mainly to the products and services and stakeholders it serves.
For instance, The Body Shop is well known for its CSR practices with a long history of activism with The Body Shop Foundation, a charity for human rights and animal and environment protection. The support given to the charity reflects Body Shop’s business ethos. It’s clear to see what they support by looking at their non-toxic, environmentally friendly products and packaging.
It’s not all altruism, strictly speaking: companies that practice CSR have lower turnover rates, higher employee satisfaction ratings, and more loyal customers than those that don’t. Here’s a closer look at how CSR practices can benefit your company:
- It improves employee engagement and retention.
In a 2022 survey in Southeast Asia, nearly half of the employees will not work for a company that does not align with their values. This aligns with international results from Deloitte, which reflected that 48% of millennials and 43% of Gen-Zs are willing to pressure their employers to fight climate change.
These numbers make sense because employees who feel connected to their company’s mission are more likely to stay at that company — and that’s what companies need now more than ever.
If your company has good CSR practices, you’ll have happier employees who stick around longer. So what does this mean for your business? It means less turnover and more productivity for the company overall. Therefore, investing in CSR is an investment in your future employees.
- Showing that you care about more than just making money can lead to better sales
When it comes to CSR practices, while more is good, it doesn’t always have to be overly complex. Simple solutions work too. After all, your business serves the customers in your community. Implementing CSR practices shows that companies care about more than just making money—they care about their community. You might think the extra measures will cost you more since you may need additional staffing to implement these practices. But that might not be the case.
Let’s say you have a restaurant and want to go above and beyond. You reduce food wastage, so you decide to offer a discount on your soup of the day every day after 5 pm.
These things might seem small, but they significantly impact people’s lives in many ways. For example, giving discounts instead of throwing away food may motivate more customers to purchase from your stall after 5pm. Whether supporting your mission or just because they love a good deal, you don’t have to waste food or pay extra to haul the garbage away. Besides, being listed on initiatives such as Giving.sg’s Eat for Good establishes a business’s positive reputation amongst other companies. This sign of solidarity benefits your reputation in the long run, and exposes your brand to new customers that might not have heard of you initially.
So while ‘better sales’ shouldn’t be the goal of your CSR initiatives, it’s hard to run away from the bottom line as a profit-making business. The good news is that CSR can improve rather than hurt your revenue!
- It helps build trust with your stakeholders
Small businesses thrive on human relations. Fantastic products and services keep customers returning, but ultimately, the human touch matters. And it’s not just customers but also your employees and vendors that you’ll need to build trust.
But it’s hard to put a personal touch on every interaction. That is where your CSR practices can help. Just like a person’s values are important, the business’s CSR measures will signal to stakeholders what they prioritise the most.
Reports show that, due to the Covid-19 pandemic, consumers feel distrustful that brands will do the right thing and prioritise people first. So it’s currently the perfect time to increase the amount of trust-building internally and externally. By signalling you care about your people, community, and the world around you, you’re showing your business’ willingness to build human connections. The research also suggests that disengaged brands that lack empathy won’t do well in our current climate.
As the world slowly moves past the Covid-19 crisis, the lingering unease that comes with prolonged social isolation will affect consumers’ sentiments. As a result, businesses will need to consider and introduce suitable CSR initiatives that will give their customers a reason to stay loyal to the brand.
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