From the company, government to other stakeholders, how does CSR benefit all
Corporate Social Responsibility (CSR) has evolved from simply being just another social obligation to be met by businesses and corporate entities. Today, it is a definite formula to not just attract stakeholders, customers, resources, and talent but also boost brand image, profitability while ensuring a sustainable future.
In some of our previous blogs, we discussed the significance of a robust and well-designed CSR strategy. Although previously, we had talked at length about how CSR activities can benefit an organization, this blog will be an all-encompassing piece dedicated to exploring the many benefits of CSR for all those involved.
“A management consultancy, specializing in brand and business strategy, defines CSR as doing business in a responsible fashion that delivers value not only to the organization but also to its stakeholders and the community within which it operates,” states a 2014 study titled, ‘Corporate social responsibility as a marketing strategy for enhanced performance in the Nigerian banking industry.
Benefits For Company
The benefits of leading a CSR initiative are many for an organization. Before exploring ways through which CSR can benefit the stakeholders, customers, among others, it is imperative to bring to focus what is there for the corporates to invest in a CSR program.
As per a report by Babson College, United States, CSR programs can lead to an increased market value and reduction in systemic risk, cost of debt, and staff turnover rate. Below, we quickly sum up how organizations can benefit through CSR initiatives while also creating a positive socio-economic, environmental impact:
- Positive impact on the community
- Bolstered brand image
- Increased sales and revenue
- Attracting new talent
- Enhanced access to capital and markets
- Employee retention, better productivity
- Better risk management/reduced systemic risk
- Operational cost savings
- Increased customer loyalty
- Minimized environmental impacts
You can also refer to our detailed blog piece on CSR benefits for corporates.
Benefits For Stakeholders
“Stakeholders are persons or groups that have, or claim, ownership, rights, or interests in a corporation and in its activities, past, present, or future,” mentions a paper on the role of stakeholders presented at Wageningen University, Netherlands.
Leading CSR initiatives is a way to create shared value for society and the business. It is this shared value that is enjoyed by the stakeholders associated with the business and gives them a reason to remain engaged with the organization in the long run. CSR helps businesses create meaningful impact for society and all parties tied to their operations, thereby helping them grow while also ensuring self-growth and profitability.
Thumb rule: Bear in mind, when stakeholders are involved in the decision phase of the CSR strategy, they are more likely to benefit from the initiative as their feedback, perspective, and expectations get incorporated in the roadmap. It also boosts the success rate of the program as well as the company’s growth and profitability.
Quickly summing up the benefits for stakeholders:
For the investors, one of the primary benefits of being associated with a CSR program is a boost to credibility and public image. Investors and venture capitalists get to reap profits once the initiative achieves its goals and creates a meaningful, sustainable impact. For investors, supporting a meaningful and credible CSR program results in a win-win situation.
The local community forms a key component of any business. Their involvement in a CSR initiative creates a shared thread where the company, the community, and society – all get to enjoy the fruits of their collective labor. Here’s how they benefit by being associated with a CSR campaign:
- Employment opportunity
- Better income
- Increased standard of living
- Promotion of indigenous culture
- Empowerment of minorities, women
Now, let us talk about the government and various local bodies. Supporting corporates in achieving their sustainability goals can also help the government and local bodies further their agenda. Needless to say, a state prepares its roadmap to push for the sustainability cause, uplift the locals, empower the marginalized, and work towards a better future. When the government’s interests marry the corporate effort, it results in the larger good and also, in most cases, speedy and smooth attainability of sustainable outcomes.
Customer is the king, therefore, a business’ efficacy is measured not just in terms of sales but also with reference to how it is perceived by the customers – their level of engagement, satisfaction and loyalty towards the organization, its brand, or services.
A brand with a strong CSR effort at its core ensures that customers get the most out of their investment in its product/service while a part of their contribution goes out for a sustainable cause. Customers may also get to learn more about a cause through a company’s CSR initiative and become more equipped to make informed decisions.
CSR activities designed, planned, and implemented with an aim to ensure everybody’s welfare is a definite key to success. It becomes a win-win formula for the business, employees, stakeholders, communities, and society at large.
Artemis Impact is a network of corporate, donors & non-profits. With our corporate enterprise solution, we aim to empower companies to build human-centered impact stories and create sustainable impact with their CSR programs & core business.