Corporate social responsibility might sound like a boring, jargony term, but it truly is a beautiful thing. Companies around the world are committing to more responsible practices. To hiring more diverse teams. To treating their employees well. To producing products with recycled materials.
72% of US consumers say it’s more important than ever to shop from brands that hold the same values.
In an increasingly polarized world, companies that stand for human rights and the protection of our environment stand out. After all, if there’s one thing we should be able to agree on, it’s the fair treatment of others, including future generations.
In this guide to corporate social responsibility, we definite this term, present key strategies, and highlight useful software to help companies reach their goals.
What is corporate social responsibility?
Corporate social responsibility (CSR) refers to the concept that businesses have a responsibility to not only their stakeholders and customers, but also to the planet, its ecosystems, wildlife, and people. CSR comprises the work companies do to uphold that responsibility.
This work includes hiring practices, marketing practices, product material choices, shipping strategies, and so much more.
Why is corporate social responsibility important?
Consumers are growing increasingly frustrated with corporations harming the environment without care or retribution. With global warming accelerating at an alarming rate, the time for finger-pointing is over. Everyone needs to do their part. Consumers need to purchase more sustainable products, and corporations need to meet this demand and change their practices across manufacturing, packaging, and every other aspect.
Studies show that the brands who lead the way with corporate social responsibility appear more authentic to customers than those who lag behind.
15 factors comprising CSR
A corporations’ corporate social responsibility is comprised of lots of different factors, from their shipping practices to who they hire and how truthful they are with their marketing campaigns.
Below, we dive into the top elements that make up CSR:
1. Factory working conditions
Dozens of consumer brands have come under fire for having poor factory working conditions. The worst of these is, of course, child labor. But low pay, lack of breaks, dangerous facilities, and other issues also abound. Because many companies contract out to factories, they need to have an internal CSR professional or consultant go and visit these factories in order to vet the safety, wellness, and pay of the workers. If there are any issues, the PR flack won’t fall just on the third-party contractor, but on the brand.
2. Corporate employee treatment
Corporations need to be mindful of how their knowledge workers and front-line customer service employees are treated as well. From health care to fair wages to ethical treatment by managers, companies need to keep a watchful eye on employee training, management, and working conditions across all levels of the organization.
3. Product or service impact
A company’s CSR can’t be separated from its revenue streams. The products or services that a brand offers have a major impact on the world. This impact can be positive or negative.
For example, eco clothing brand Pangaia shares the positive climate impact of all of its products. Shoppers can see how much carbon, water, and pesticide use is reduced by purchasing one of Panagaia’s products over a similar item from a company that doesn’t prioritize sustainability.
Service-based businesses are not immune to environmental impact. For example, a consulting firm might have a high carbon footprint due to business travel for in-person meetings. To combat their footprint, business travelers can consolidate their trips and eliminate unnecessary in-person meetings.
Because of the increasing urgency of the climate crisis, companies across all industries should take efforts to reduce the environmental impact of their products and services.
4. Shipping impact
Shipping practices also make up a company’s overall CSR. In Hulu’s Inside Missguided series, Missguided CEO Nitin Passi shares that the company has taken efforts to produce more garments within the UK, thereby reducing carbon emissions from shipping products from overseas.
Shipping logistics is an enormously complex field and requires unique expertise to solve carbon emissions issues. For example, one company might need to move a manufacturing facility, while another might need to partner with more third-party picking-and-packing companies in order to ship products in bulk to a geographical area, rather than for each individual customer order.
5. Local presence impact
Wherever your business operates, you create an impact. This is true for all sorts of physical locations, including:
- Client offices
- Storage facilities
It’s important for the ethics or CSR person on your team to review practices at these facilities. For example, if one of your long-term storage partners has wasteful energy usage, that negatively impacts your company’s overall environmental footprint. By the same token, if a manufacturing partner is leaking harmful chemicals to a nearby stream, the responsibility for funding that operation lies with your corporation.
6. Carbon footprint
A business’s carbon footprint is made up of all forms of fuel consumption:
You can use carbon emissions tracking software to capture carbon data from every aspect of your business and set goals for reduction.
7. Plastic waste
When it comes to taking responsibility for the impact a corporation has on the environment, it’s not all about carbon emissions. Your plastic usage and waste is also crucial.
Just how bad is plastic waste? Really bad:
- Around the world, 300 million tons of plastic is produced each year.
- Plastic can take anywhere from 20 to 500 years to decompose based on the type, thickness, and size.
- Plastic has a number of harmful effects on the environment, including threatening wildlife both at sea and on land and spreading toxins to wildlife, plants, and humans.
Every corporation around the world should be taking urgent measures to reduce the amount of plastic they consume and produce. There are a number of affordable alternatives, including bamboo and vegetable-sourced materials.
8. Water usage
With water shortages ongoing in many parts of the world, corporate activities can have a big impact on local communities. Big corporations are known to have a negative impact on water shortages, whether for cooling their data centers or growing a critical ingredient for their key recipe.
Socially responsible companies should continuously strive to lower their water usage across every aspect of their business, from manufacturing to their office facilities. You can use water management software to track usage and set reduction goals.
9. Marketing and PR impact and truthfulness
Are you using marketing and PR to cover up bad business practices?
Brands do this all the time. They might greenwash their products and create an ad campaign that looks eco-friendly, when the reality is anything but. Or they might feature diverse models on their website, even though their corporate and executive hiring practices aren’t diverse.
Within your digital marketing analytics, you should be tracking social listening. Just like it sounds, social listening is when you pay attention to what people are saying about your brand online and collect those insights. For important promotional campaigns, products, and announcements, you should be collecting audience feedback. Make sure to also watch out for brand mentions with a negative sentiment. If your brand gets called out for greenwashing or some other form of untruthfulness, take time to really listen to what people are saying online. Learn from the experience and don’t let it happen again.
Brand need to think about the impact of their marketing beyond getting called out for falsehoods. For example, a clothing brand might need to consider the impact of their images on the body confidence of young girls.
10. Company transparency
Today’s consumers care about transparency, and social media is one of the best channels that a company has to be transparent. 86% of consumers are likely to consider switching to a competitor if a brand they’ve purchased from isn’t transparent on social media.
The good news is that companies who prioritize corporate social responsibility can utilize social media to share their progress. You don’t have to be carbon neutral or plastic-free today. Instead, what you need to do is set goals for achieving these realities and share your gradual steps forward with your audience.
Even if you have a better CSR program than your competitors, a lack of transparency into this program makes it almost as if it didn’t exist.
11. Hiring inclusivity and opportunities
Diversity, equity, and inclusion (DEI) is important across all levels of an organization. Socially responsible companies understand that many corporate spaces haven’t been diverse, equitable, or inclusive for far too long. These companies take strides towards hiring qualified employees from a diverse set of backgrounds.
DEI consultant and trainer Shaun Wanzo explains why DEI matters in corporate spaces:
If you’re not sure if your company is prioritizing DEI, hiring a dedicated DEI trainer is a smart move.
12. Employee Conduct
Your brand is responsible for the actions of your employees, even when they’re not on the clock. Companies can come under fire for the social media posts of their employees and business leaders, what they say and do during interviews, and all sorts of other activities. That’s why businesses need an employee code of conduct policy.
13. Employee volunteerism
Many socially responsible corporations encourage employee volunteerism. This way, they’re not only paying employees to boost profits, but they’re also investing employee time to positively impact local communities.
Toms of Maine is one of the best-known examples of this. Employees can get paid for up to 12 workdays of volunteering each year.
This not only improves the brand perception with consumers, but it also helps with employee morale and retention as well.
14. Corporate giving
Does your company give back? Corporate giving is a major factor in your overall corporate social responsibility.
Many corporations have joined 1% For The Planet, and have pledged to donate 1% of their profits to organizations that are saving the environment.
Or, your company might pledge to donate a percentage of sales or a certain dollar amount each year.
For best results, donate to causes that impact consumers as a whole as well as causes that align with your brand, such as Who Gives a Crap (a brand of sustainable toilet paper) donates money towards building sanitary toilets in developing countries.
15. Third-party relationships
Who you do business with reflects on you, whether that’s good or bad. An ethics or CSR professional should review contractor and agency relationships, business partnerships, and other third-party contracts to detect any issues with how those entities do business. They might have publicly available political ties or beliefs that clash with your audience, or they might have unethical hiring or employee management practices. Corporations should also develop a set of guidelines so that individual decision-makers know what to look out for when choosing contractors.
How to develop a corporate social responsibility strategy
Your company strategy should incorporate all factors (factory working conditions, corporate employee treatment, product or service impact, shipping impact, local presence impact, carbon footprint, plastic waste, water usage, marketing and PR impact and truthfulness, company transparency, hiring inclusivity and opportunities, employee conduct, employee volunteerism, corporate giving, and third-party relationships).
No two companies’ CSR strategies will look alike. And that’s because every business has a different starting point, not to mention different products and services.
However, every company should examine their business across all of the above factors and develop a 10-year plan with goals for each year along the way. For example, a brand might aim to increase employee volunteerism by two hours per employee per year until hitting a 32-hour average per employee. Or, a company might seek to cut down on water usage by 10% a year until hitting a specific goal.
Goals should be tackled with concrete environmental and social responsibility programs that can be tracked and measured.
CSR risk mitigation and improvement strategies:
- Improving employee working conditions
- Improving employee health and wellness
- Decreasing usage of natural resources
- Utilize more renewable energy sources
- Improving usage of recycled materials
- Increasing employee volunteer hours
- Improving diversity amongst employees
- Improving diversity amongst models and spokespeople
- Sharing CSR goals transparently
- Regularly reviewing CSR factors to identify risks
How CSR companies and consultants can help
Because CSR is so complicated and far-reaching, it can be difficult for companies to manage it completely in-house. Many corporations turn to consultants for an outside eye, even if they have a CSR professional on the payroll. In-house CSR teams can partner with consultants to more effectively review partnerships and practices across the organization. In-house CSR teams can contract out help where they have weaknesses. For example, the in-house team might have a great employee volunteerism program in place but might not have a third-party vetting policy.
Examples of CSR companies include:
- Consultport – Consultport offers CSR consultants who identify CSR opportunities, assist in implementation, and create KPIs. The company has been hired by Microsoft, Philips, and other large brands.
- FSG – This company specializes in CSR consulting for both corporations and non-profits in order to help organizations improve how they address both social and environmental issues. They’ve helped develop a CSR strategy for Toyota, General Mills, and other brands.
- The CSR Group – This consulting group helps businesses improve responsibility across their supply chain, create and implement a sustainable business strategy, and report on their efforts. The CSR Group’s client list includes Whole Foods, Burt’s Bees, Hyundai, and other innovative brands making waves for their sustainable practices.
Large consulting firms might be out-of-budget for many smaller brands. You might want to consider searching for independent CSR consultants on LinkedIn to see if they offer smaller consulting packages to fit your needs.
10 CSR Tools
There are many different types of corporate social responsibility tools because there are so many important CSR strategies and projects that need to be managed. Some tools can be used to manage employee volunteerism. Others can be used for cause marketing. And others track and report on carbon emissions and water usage.
Here are some of the best software for managing CSR initiatives:
With Selflessly, you can manage your company’s purpose-driven work, including company donations, employee volunteering, and company matching. In addition to the giving and volunteering features, Selflessly also offers reporting into your purpose-driven work, which you can use to set and achieve goals as well as to share your efforts publicly with customers.
Givz is a one-of-a-kind cause marketing tool that makes it easy for you to offer donation incentives to your ecommerce customers. Donation incentives can be structured similar to discounts, but used in place of discounts. For example, you might offer customers the ability to donate $30 to charity for any charity for any purchase over $150. With Givz, customers can choose the charity they want the money to go to, but they don’t have to pay any extra. The donation comes from your store. Givz manages all the giving and tax documentation.
With Alaya, you can manage employee volunteering, employee donations, and donation matching. You can also host purpose challenges to engage your employees in sustainability initiatives, wellness programs, or any other challenge you can think of. The challenge feature helps this platform stand out from similar competitors. Especially since an organization’s sustainability requires the cohesive efforts of the entire company, the opportunities for the challenges are endless.
Vee is a platform that corporations can use to manage employee volunteer work and that non-profits can use to recruit new volunteers for their organization. On the corporate side of things, some popular features include volunteer program management, volunteer registration and reminders, and employee performance tracking and reporting.
5. Bright Funds
Bright Funds is a platform for managing workplace philanthropy, including employee donations, employee volunteering, and grant creation and management. Companies can choose from Bright Funds researched and selected list of non-profit impact stories, share these with employees, and donate directly.
WeSpire is a platform that can help companies achieve a variety of CSR goals, including tracking and reducing their carbon, increasing employee volunteerism and giving, setting and reaching DEI goals.
EcoVadis offers sustainability ratings that companies can use to assess their own sustainability in order to drive waste reduction and cost savings. These ratings can also be shown to potential business partners and shared internally with eco-minded employees to help improve employee retention and buy-in for various initiatives.
EMEX is an environmental, health, and safety (EHS) management system and an environmental, social, and governance (ESG) software rolled into one. Some of the key features include sustainability questionnaires and data collection, sustainability monitoring and reporting, and customizable dashboards for various stakeholders.
VelocityEHS is an EHS software that companies can use to drive risk mitigation and program improvement across a variety of operational categories, from carbon emissions to worker health.
Emitwise is sort of like the Quickbooks of carbon tracking. The platform’s carbon accounting features can track direct and indirect greenhouse gas emissions, as well as efforts taken to remove or offset this carbon. Companies can use this data to set and reach their goals as their approach carbon net-zero. Companies will also have accurate data to transparently share with customers.
Givz back with Givz
Givz makes it easy for ecommerce companies to give back to charities that customers care about. Customers can choose which charity to donate to after making a qualifying purchase. You can offer a donation after any purchase or only for purchases over a set limit.