Being a responsible company in 2020 means looking beyond your business operations.
Seven-in-10 (70%) Americans believe companies have an obligation to take actions to improve issues that may not be relevant to everyday business operations, according to a study by Cone Communications.
Consumers and employees are dissecting a company’s values more than ever, which is why corporate social responsibility (CSR) is not just a fad. It’s a new standard for companies to increase revenue and attract talent.
According to Cone Communications:
- More than 60% of Americans hope businesses will drive social and environmental change in the absence of government regulation;
- Nearly 90% of the consumers surveyed said they would purchase a product because a company supported an issue they care about; and
- Nearly 75% said they would refuse to buy from a company if they learned the company supported an issue contrary to their own beliefs.
Corporate Social Responsibility Definition
There is no one right way for businesses to practice CSR.
The International Organization for Standardization (ISO) defines CSR as the responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that:
- Contributes to sustainable development, including health and the welfare of society;
- Takes into account the expectations of stakeholders;
- Is in compliance with applicable law and consistent with international norms of behavior; and
- Is integrated throughout the organization and practiced in its relationships.
Practicing CSR helps a company be socially accountable to itself, its stakeholders and to the public. Many CSR companies aim to positively contribute to their communities, the economy or the environment.
5 Types of Corporate Social Responsibility
CSR initiatives can take place in a variety of ways. In general, most initiatives fall into one of the following five categories:
- Corporate Philanthropy: The investments and activities a company voluntarily undertakes to responsibly manage and account for its impact on society.
- Corporate Volunteerism: Companies encourage their employees to volunteer as an individual or through an organization-wide effort.
- Environmental Leadership: Businesses take steps to reduce their carbon footprints and support environmental causes.
- Ethical Labor Practices: Corporations treat employees fairly and ethically – domestic and internationally.
- Economic Responsibility: Organizations invest back into their local communities and offer competitive wages for employees.
Participating in any of these five types of corporate social responsibility is growing in importance, as consumers and employees seem to be holding companies more socially accountable over time.
According to the Cone Communications study, nearly nine-in-10 (86%) Americans expect companies to do more than make a profit, and believe they should also address social and environmental issues. And more than two decades of benchmark data reveals the growing positive impact of CSR on brand reputation, loyalty and affinity.
Examples of CSR Companies
Some of the largest corporations in the U.S. are well-known as organizations that practice social responsibility. And they all approach CSR in a unique way that makes sense for their companies and brands.
For example, TOMS donates one-third of its net profits to various charities that support physical and mental health, as well as educational opportunities. Starbucks has implemented a socially responsible hiring process, focused on hiring more veterans, young people looking to start their careers, and refugees. Google is investing in renewable energy sources and sustainable offices.
Large or small, companies of any size can adopt CSR strategies that best fit their business models.
CSR with Corporate-Advised Funds
Corporate philanthropy remains one of the most common ways companies implement CSR practices. A unique way corporations can leverage this type of CSR is through a corporate-advised fund.
An advised fund is a charitable vehicle that offers flexibility and customization, allowing companies to engage employees and make a strong philanthropic impact.
With advised funds, companies can give gifts of cash, stock, real estate or other assets to the fund, which is managed by a charitable sponsor organization, like a community foundation. As the charitable assets grow under the stewardship of advisors and investment managers, companies grant the funds and charitable return on investment to nonprofits.
If your company is just beginning to consider how to adopt or expand your CSR strategy, The San Diego Foundation team is here to help you further your charitable giving goals.
Contact our Director of Development & Stewardship Cami Mattson at email@example.com or (619) 814-1385 to learn more.