Increasing CSR investment and forging social sector partnerships in a post-COVID-19, recessionary world isn’t just the right thing to do, but the smart thing. CSR has been evolving since the 80’s (read blog 1 for the evolution of CSR) and we are now at the critical point where Corporate Social Responsibility must become Corporate Social Response – action.
Twenty-twenties decade – the tipping point for CSR
Over the past decade, Corporate Social Responsibility has come of age. It’s now considered an essential, wholistic strategy encompassing human rights, labour practices, diversity, equality, transparency, privacy, renewable energy, environmental protection and restoration, operating and marketplace practices, governance, safety, risk, legal compliance, community development, staff volunteering and charity partnerships. Gone are the days of ‘ticking the box’ CSR, paying lip-service and when recycling, a bit of philanthropy and some pro bono volunteering would keep the activists at bay.
Those activists are now your customers, your employees, your stakeholders and your shareholders.
CSR is now a multifaceted and sophisticated strategy. What makes it more complex is the never-ending jargon – TBL, CCI, CR, CSV, Sustainability. I prefer simplicity. Corporate Social Responsibility (CSR) is minimising your company’s negative impact on society and the planet. Social Good is pro-actively maximising your company’s positive impact on society and the planet.
CSR is the strategy. Sustainability is the goal.
It would be natural, under the current circumstances, to not prioritise something that, only a decade ago, was considered a discretionary, feel-good option. But this decade is different. Australians believe that Business is the only sector with the resources and mindset to solve the many social problems we face – social problems that are only going to increase in the months ahead. Recently, 78% of Australians said that CEOs should take the lead on change rather than waiting for government assistance, a significant increase since 2018.
We’ve reached a tipping point, and Corporate Australia must step up. There is great risk in not doing so. Ignoring CSR makes your company extremely vulnerable to the next challenge – the court of public opinion. Hyper-sensitive consumers will remember how you behaved through this crisis – they’ll never forget how you made them feel.
We have a rare, short window of opportunity to create a new, more resilient, equal and thriving society. A vision such as this will engage and galvanise your investors, employees and customers. This is the kind of company that people will want to work for, trade with and invest in. Companies that live and breathe Purpose will be the ones to thrive.
Companies that watch indifferently from the sidelines, trying to return to the previous ‘normal’ will be regarded as irrelevant, out of touch and ultimately, obsolete.
Here’s 5 key reasons to increase investment in CSR & Social Good:
1. Win back trust, enhance reputation
“Trust in multilateralism and official institutions is crumbling…the world needs your leadership.” ~ Larry Fink, Chairman & CEO of BlackRock
When a billionaire with $6.5 trillion in assets under management talks about trust and CSR in his annual letter to CEO’s for three years straight, you know it’s serious. Trust is the glue of all relationships, and the single most important factor that drives corporate reputation.
Consumers don’t trust corporations. The last decade saw a global uprising against corporate greed, inequality and environmental plundering, resulting in the lowest ever trust levels in business, at the start of 2020. Australia is no different and it’s the millennial generation – your current employees and customers – that feel the most let down.
Corporate scandals have eroded trust in the sector – privacy breaches, tax avoidance, animal abuse, exploding devices, the banking Royal Commission, slave labour practices, environmental disasters, #dieselgate, misleading advertising, and wage routs, to name just a few.
The annual Edelman Trust Barometer 2020 revealed that lack of fairness was a fundamental reason for mistrust, with only 24% of Australians perceiving Business as ‘serving the interests of everyone equally and fairly’.
The 2020 Ipsos study of most trusted professions rated business leaders at a dismal 17% trusted, with politicians and bankers below. In a striking new trend, ‘ordinary men and women’ scored 42%. I’ll politely skip how the Legal profession fared (it’s not favourable).
2. Enjoy customer patronage and loyalty
“Business must assume moral leadership. It should be about responsibility, about public good, not private greed.” ~ Dame Anita Roddick
Frustrated and outspoken customers are demanding change and they’re using their voices, skills and wallets to be heard. They’ve had a gutful of scandals and, fearing for their future, believe not enough is being done to address society’s problems and climate change.
The time of the vigilante consumer is here, and they’re supported by an army of apps, websites, blogs, podcasts and TV shows exposing unethical behaviour, marketing tricks and corporate hypocrisy.
There is overwhelming global evidence that embracing – and practising – CSR & Social Good impacts consumer purchase behaviour – everything from buying a product, advocating on behalf of that product, paying a premium for it and recommending it.
Now that’s the type of customer you want.
It also works in reverse – 1 in 5 Australians have actively boycotted companies and brands in the past year, due to bad behaviour. Boycott doesn’t mean clicktivism either – the most common boycotting action was ‘refusing to buy from a company or brand’. ‘Bad behaviour’ includes a multitude of sins – animal cruelty, unethical behaviour, inaction on climate change, avoiding tax and workers’ rights to name a few.
3. Attract and retain the best talent
“Customers will never love a company until the employees love it first.” ~ Simon Sinek
Millennials account for 50% of the workforce. They’re innovative, thrive on technology and they’ll work hard for money – but even harder for Purpose. Out of touch leaders that complain that millennials are difficult, distracted or disloyal simply don’t understand the millennial mindset.
The disconnect between what millennials want and what companies are delivering is vast. 67% of Australian millennials rate ‘positive work environment’ over money when choosing an employer.
Companies that that have people clamouring to work for them have a values-based culture and demonstrate strong, visible commitment to CSR & Social Good. Companies like IAG, Westpac, Lendlease, Atlassian and SEEK.
Just consider the investment your company makes in replacing and retraining employees – how much could you save if you could keep staff? Build a great CSR program and engage employees and they’ll be happy, motivated, productive and loyal. Even better, they’ll everyone.
Thanks for reading! The 3rd and final part of my blog details how CSR & Social Good enables you to resonate with consumers and stakeholders through uplifting, inspiring stories (greatly needed right now, as we experience our biggest collective crisis in centuries and enter an unprecedented recession) as well as how implementing CSR can save millions of dollars in wastage. We also have an awesome free infographic that summarises all 5 benefits – download here
 Triple Bottom Line, Corporate Community Investment, Corporate Responsibility, Creating Shared Value, Sustainability
 Edelman Trust Barometer 2020
 Edelman Trust Barometer, February 2020
 Numerous studies cited in Talking the Walk 2019
 Talking the Walk, July 2019
 Showing support for a cause on internet – social media likes or petitions
 Talking the Walk 2019