At this juncture, no one can successfully claim, they do not know what CSR is. We see corporate social responsibility (CSR) everywhere. We see food giants sponsoring marathons, tech companies that make their software open-source, banks that offer scholarships and manufacturing firms that donate to green causes.
There’s no one-size-fits-all model of corporate social responsibility. Any action that a company takes to give back to society can fall under the CSR umbrella. Harvard Business Review identified four main motivations for companies to create a CSR program: moral obligation, sustainability, license to operate and reputation.
In today’s climate, while moral obligation may still be a contributing factor, companies need to engage in a corporate social responsibility strategy just to keep up. In 2018, analysis by the Governance & Accountability Institute found that 86% of companies in the S&P 500 Index published a sustainability or corporate responsibility report. Now imagine what this is today.
One report, Project ROI: Defining the Competitive and Financial Advantages of Corporate Responsibility and Sustainability, shows the return of high performing Corporate Responsibility (CR)/Sustainability initiatives on factors like market value, sales, human resources, and risk mitigation.
For example, CR/Sustainability can drive an increase in sales revenue by anywhere from 1 to 20%. And/or it can allow price premiums to increase from 1 to 20% as well. Unilever, for example, has famously credited its sustainability practices for a 26% jump in sales.
How companies get these results require embracing highly disciplined and strategic management practices. Here are five ways that the Report identifies a company can use CR/Sustainability to drive sales:
• Develop close partnerships with Marketing. Top companies now view social purpose, sustainability, and marketing as one in the same rather than having separate missions.
• Identify and engage the core 1-20% of the customer base ready, willing, and able to be activated as the company’s “CR brand ambassadors”
• Assess how customers intuitively relate the company’s products, brand, and culture to environmental and/or social sustainability issues
• Build in, rather than bolt on, sustainability messages to advertising campaigns
• Work through the delicate balance of activating customer pride, and even a bit of guilt, in forming sustainability messages.
