Corporate Social Responsibility
“Corporate Social Responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it because it is good for our business.”– Niall Fitzerald, Former CEO, Unilever.
It is rightly said that a business cannot succeed if the society around it fails. Corporate Social Responsibility or CSR has become an integral part of a company’s functioning and rightly so. We hear that a particular company has a stronger CSR approach and hence, is ranked higher than some other company. Understanding the meaning of corporate social responsibility is important for this very reason.
It is rightly said that a business cannot succeed if the society around it fails. CSR is nothing but a business approach which gained popularity in the 1900s wherein it was used as a form of stakeholder engagement and social regulation. Corporate Social Responsibility is a practice of corporate self-regulation which is duly incorporated into a business model for greater benefits. It is basically a mechanism by the means of which a business oversees and ensures dynamic compliance with the standard guidelines of ethics, the spirit of law and norms set by international governing bodies.
CSR is a business model which entails that a company take responsibility for its actions and encourages the protection of the environment, its consumers and society in general. When a company has amalgamated corporate social responsibility in its approach to business, it will be conscious of certain facts which are under its control and could prove detrimental to the society in any way. For instance, a company ABC, is a manufacturer of microchips which requires it to work with various metals and leaves a lot of waste which, if disposed off into the oceans without proper treatment will cause significant damage to the aquatic life. For a company that cares about what impact it leaves on the environment, it will treat the industrial waste before disposing it off.
Another example of responsible behaviour would be evident when a company involved in the mining business provides worthy and respectable relocation options to the residents of the area to be mined. This is a requirement by law but the approach towards abiding by law in such a case is an indication of socially responsible behaviour. A company’s social standing is also exhibited by how it deals with issues within the company. For example, if a case of sexual assault or molestation has occurred, it is the duty of the company to involve appropriate authorities and co-operate fully, with investigation instead of cowering away and being obstinate about protecting the image of the company.
After looking at the definition and explanation of CSR, one tends to wonder how this may prove favourable to what a company mainly does: business. When the concept of CSR is further explored, the long term and short term benefits of CSR are self-evident.
Adopting a business model which has an emphatic approach on CSR can help you avoid financial complications. A strong CSR strategy makes sure that you are in complete compliance of legal and ethical policies. This, in turn, saves a ton of money which could have been spent on hefty legal fees. Moreover, there are a number of tax benefits that arise from being involved in socially uplifting initiatives. Also, a business that complies with all national and international norms is usually not on the radar of regulatory bodies which is very important for the image of the business.
Employees are the most important fragment of a company and finding loyal employees is quite a task. When you do find employees that are devoted to your organization, retaining them is of pertinence. Research shows that more number of people prefer working in an institution which has a robust CSR structure than a company that doesn’t. By providing good jobs and promoting high professional and ethical principles, you increase employee loyalty, and by acquiring only those overseas products produced at factories where workers were treated ethically, you gain support among ‘Fair Trade’ advocates.
A company with a sturdy CSR structure indubitably has a reputable image in the eyes of not only its consumers but also stakeholders and potential investors who are significant to the growth of business. There are various ways in which a company can demonstrate the extent of its involvement in social causes. One way is to create a website which is more sustainable. A website has more reach than any other medium.
A few simple changes to your website can be made that will provide tangible proof of social responsibility. Replacing a video with a slide show, decluttering the screen, adding fewer images will help you reduce the carbon footprint of the website drastically. Also, a new initiative that seems to have caught on is that of letting your consumers select a charity they would like to donate for. This goes to show that you keep up with what is happening around you and that you are concerned. Sponsoring seminars and conferences and health check camps for your employees also helps strengthen your image.
For instance, a company carried out a blood donation camp in collaboration with a blood bank. This was open to locals as well as employees. Since the blood camp was carried out on a large scale, it received press coverage too. Not only did the company gain in terms of goodwill from its employees but it also made its mark on the locals. Stakeholders and potential investors were also reached due to the press coverage.
Corporate Social Responsibility is a business theory that has been integral to the success of many huge companies. On a concluding note, it is rightly said Corporate Social Responsibility isn’t a particular programme, it is what we should do every day, to maximise positive impact and minimize negative impact.
Writer at Digipundit
Mrunmayi Gaikwad, soon to be a wielder of the scales of justice, harbors a twin passion for law and for poetry. Writing is more than just a hobby for her – it is a release. Mrunmayi is an avid reader and hopes to have her own personal library someday. Her family and the city of Mumbai are two pillars of her life.