What is Corporate Social Responsibility (CSR) and why is it important?

It is 2021 and the world is still battling COVID-19; the UK has just been put into a third national lockdown and other countries are experiencing similar challenges with this virus. Therefore, the one thing this global pandemic keeps teaching humanity, is how connected and vulnerable we all are.

So, what does this all have to do with Corporate Social Responsibility (CSR)? – a lot. In simple terms, CSR is a company’s fundamental societal responsibility, as its decisions and activities clearly have an impact on society and the environment. It is important to differentiate between CSR, which is a strategic business management concept, and the broader realm of philanthropy, not-for-profits and charities. CSR enhances the reputation of a company and strengthens the brand.

 

SO WHAT IS CSR?

Socially responsible companies’ transparent and ethical behaviour contributes in a positive way to sustainable development, including the health and the welfare of society. Just as the pandemic has prompted us to reflect and review our lifestyle choices, it’s also triggered organizations to question their purpose and value within the overall business ecosystem. This has increased the development of CSR initiatives, with more businesses feeling the pressure to respond to consumer expectation for them to operate with a stronger, better social conscience.

Our experience of the current crisis has shown to the public that government intervention can only go so far – companies can and should take on the responsibility too. Many have promoted the government’s social distancing measures and have even pivoted business models to support with the shortage of PPE and hygiene products.

 

HOW OUR EXPECTATIONS HAVE CHANGED

As we saw and experienced during the first lockdown – the major CSR initiatives focused onto were directly related to public health initiatives, support for consumers and safeguarding employee welfare. Nowadays, a company’s CSR strategy is benchmarked against its ability to maintain health and safety processes and procedures in their operations, production and service delivery to an excellent standard. This includes their well-being initiatives, specifically around mental health for employees.

People’s expectations of companies have shifted as consumer decision making is even more driven by social and environmental concerns. However, now with a recession and the financial strains caused by the pandemic, it could lead to companies pursuing short-term gains as they enter survival mode, causing them to reduce or abandon their CSR initiatives. But the key here is strong leadership and the pandemic offers the best way perfect test for businesses to test the robustness of their CSR strategies.

 

HOW BRANDS ARE ALIGNING TOGETHER THROUGH CSR

In the autumn last year, the chief executives of Danone, L’Oreal and Philips were among the signatories of an open letter calling for the creation of an economic system that “puts purpose first, so our planet and society can thrive”, through Covid-19 recovery efforts.The letter addresses many issues and calls on governments and businesses to implement processes and develop cultures what will further the transition after the initial Covid-19 recovery period. Both businesses which have already embedded purpose, and those wanting to transform, should be supported in the long-term, it concludes.

A quote from UN Secretary-General Antonio Gutteres is included in the letter:

“Everything we do during and after this crisis must be with a strong focus on building more equal, inclusive and sustainable economies and societies that are more resilient in the face of pandemics, climate change and the many other global challenges we face.”

The chief executives of Mastercard, Mahindra, Interface, Danone, DSM, Philips, L’Oreal, Natura & Co, Beiersdorf, Omnicom-Ketchum, ICC, Equity Bank, Fortune Media and Space Voyager Holdings signed the letter; and these companies collectively employ more than half a million people and record annual revenues of more than $100bn.

Sir David Attenborough reflected on the challenges of the coronavirus pandemic and earmarked 2021, as a crucial moment in the climate crisis battle during his specially recorded New Year message for the BBC. In his message, Attenborough acknowledged that 2020 was a difficult year — both for the planet and himself — but the past 12 months proved that people can pull together to make a difference. He also mentioned this year’s United Nations Climate Change Conference in Glasgow, in November and said,

“It’s a crucial moment in our history. This could be a year for positive change, for ourselves, for our planet and for the wonderful creatures with which we share it. A year the world could remember proudly and say, ‘we made a difference’. As we make our new years’ resolutions, let’s think about what each of us can do.”

A green recovery is crucial and can be profitable. Running a business is always about making a profit. In my book, Corporate Social Responsibility Is Not Public Relations, you’ll learn from the interviews I conducted with business leaders and entrepreneurs that being a CSR-led business can be just as profitable.