Whether you have small or big corporate, you must have the framework for understanding CSR
Lego became the world’s most reputable company for corporate responsibility in 2019. They brought back the title after becoming number one in 2017 and being replaced by Google in 2018. This toy company has a good commitment to understanding CSR. Lego conducts the business ethically and fairly also supports environmental concerns.
What is CSR?
Corporate Social Responsibility (CSR) is a company’s approach to incorporate social and environmental issues in its business. It also allows interactions with the stakeholders.
This action is generally understood that the company does not only care about economic objectives but also social and environmental responsibility. These three elements are known as the triple bottom line approach. Moreover, CSR informs the stakeholders and shareholders about the company’s impact on society.
CSR can be in the form of charity, sponsorships, business management concepts, and philanthropy. Yet, the notion of understanding CSR goes beyond that. The United Nations Industrial Development Organization (UNIDO) explained that the principal CSR issues. They are eco-efficiency, stakeholder engagement, labor standards, and working conditions, social equity, and more.
Why a business needs CSR?
- Strengthen your brand image and reputation
You may have encountered people do community service wearing a t-shirt with a company logo. Or, you see a company logo in some events held by local nonprofit organizations. This is the power of CSR. It will make people recognize how positive and valuable the impact a company brings.
- Increase the customers’ loyalty and sales
Cone Communications has conducted research on this topic. Almost 90 percent of the customers will buy a product from a company that supports an issue they care about. And, more than 75 percent of them refuse to buy from a company supporting issues they are opposite to.
Thus, promoting linear issues with consumers has a direct influence on your company’s profit.
- Get easy access to funding
A lot of investors accustom to sustainability issues. So, if companies do not consider CSR as their business strategy, they will be left behind by the investors. When a company holds CSR programs, it means that the company also has high transparency. And, investors like information about how and where their money is managed.
- Maintain and attract talented employees
CSR also the reason people stay and join your company. They know that they work for a company that has the core values as theirs. They will feel they are contributing to the issue. Yes, people do care about the revenue, but their call as a human being never fades.
Types of CSR
- Environmental efforts
This kind of CSR focuses on environmental problems, especially produced by the company. Businesses, no matter how big or small, own carbon footprints. So, they need to decrease the footprints by minimizing pollution or integrating natural resources in their products.
Philanthropy includes donating money, products, or services to social issues and nonprofits. You can notice some scholarships from companies like Dell, Microsoft, or Burger King. Tech companies such as Apple, Amazon, and Google also show their support on Black Lives Matter.
- Ethical labor practices
By offering fair practices regardless of the employees’ gender and background, a company has demonstrated the CSR. This is significant especially for global companies. It is because each location has diverse labor laws.
- Economic responsibility
This responsibility refers to their attempt to facilitate their business while generating benefits for the community. For example, a company uses a new manufacturing tool to reduce wastage.
Understanding CSR report
A CSR report is a periodical report released by companies. It aims to share their CSR actions and results. This type of content writing is usually published annually and often distributed on their website.
For the company itself, CSR reports help them get valid and accurate data. This can be the measurement of how impactful their activities are on the society, environment, and economy. So, it can guide them to upgrade their processes and impacts.
This report is also the key to transparency to external stakeholders. The stakeholders will get to know the companies and their CSR programs better. They will calculate the short-term and long-term goals. As a result, they can decide whether they will buy the products, invest in the company, or write positive and negative reviews.
What to write in CSR report
- Business review
This part tells the readers about the brief summary of what your company does and the up-to-date performance. Business review help readers understand the context of particular CSR programs.
For example, Nike provides fundamental information on its business review. It consists of its business model, current products, and a list of the brands they own. Nike also shares important financial data. They include the return of investment (ROI) and annual revenue.
- Letter from the CEO
This letter usually contains the history or other interesting backgrounds of a company. Thus, it can be a great opening for readers to follow the rest of the CSR report.
James Bordin, the CEO of Ingka Group, starts the IKEA CSR report by stating that they did a great job during the fiscal year 2019. He explained the percentage of how online sales and business performance went.
- Sustainability goals
The sustainability goals describe a SWOT analysis and the current issues in the market and industry. This displays how the company holds its environmental and social responsibility.
Google uses graphics and pictures showing how they control their energy management. It relates to how the data centers work along with the source and the process of their renewable energy.
- The prioritization in issues
Do you remember that the CSR report also tells how a company deals with its employees? In this section, the company divides its prioritization on how they conduct the CSR.
For example, Coca Cola inputs their concerns about health research on sugary beverages and how they carry on with plastic waste.
Do you want to give back to society? Or you aim to build a brand image? Whatever the reason is, understanding CSR is absolutely important for your business.