Corporate Social Responsibility (CSR) is no longer a new term to SMEs and entrepreneurs; however, though it is used often, people tend to mistake CSR with Charity and Philanthropy. Not only is CSR different from the latter two concepts, it brings a lot more value to companies when applied with then right plan and proportioned investment.
The Upside of CSR Planning
CSR planning could make a business more competitive compared to others with similar products or services. It is believed that consumers appreciate the positive impact of businesses upon the community through a concrete CSR planning. Research has shown that consumers are willing to pay 25% more to buy a product/ service from a company with a higher ethical business strategy and that they will choose to buy goods made by disadvantaged people even though it might cost more. Once effectively communicated, a company with a disabled-friendly working environment or LGBTI+ equality could enhance that company’s value. For example, The Bodyshop’s “No cosmetic testing on animals” campaign created awareness and also helped them win against direct competitors.
While many companies have to spend a lot of money in branding, another good way to shine your brand with lower investment is CSR. Tiger Beer has embarked on a six-year global partnership with Worldwide Fund for Nature (WWF), starting with a USD 1 million annual donation to support the organization’s tiger conservation efforts. Their slogan “Can you imagine a world without tigers?” has been very successful. It is just one strong example of investing in your brand and doing good in the community at the same time.
Building Brand Ambassadors
When CSR is done well, not only are customers likely to become outspoken fans, your staff and partners are likely to become brand ambassadors as well. Employee turnover ratio tends to be lower in companies more dedicated to putting integrity and environment over profit. Indeed, we know that businesses can save a lot more money and maintain the quality of services when they have employee engagement and commitment. At the end of the day, CSR can make a cycle of positive growth to win everyone’s hearts.
Last but not least, many SMEs continue doing charity in very basic ways without any strategic planning, instead acting upon impulse which can result in negative side effects to the beneficiary or natural environment. A common charity activity is bringing foods in plastic containers to poor people on the street or in hospitals which helps the underprivileged but sends large amounts of harmful single use plastic to the environment. A thoughtful CSR strategy can avoid this kind of mistake and invest money with more positive impact.
More often than not, charity and philanthropy are considered an expense by enterprises. Thus, a decrease in charity and philanthropy budget is the first avenue to reduce cost. Due to the common misunderstanding of these two terms, CSR is also treated unfairly during the difficult times. With the above-mentioned benefits, CSR should be viewed as an investment rather than an expense.
“Everyone needs to be loved – No one deserves to be pitied” and CSR is a right way to love people and nature with deep understanding and strategic planning.
First published on CanCham.org 3 August, 2020.