A Mutually Beneficial Responsibility
CSR is no longer an annual altruistic gesture but an increasingly important component of business strategy that is being integrated into the proceedings of several corporations.
There was a time not too long ago when taking part in corporate social responsibility (CSR) set corporations apart from their competitors.
However, in the last few years the spike activities centering around environmental concerns and social responsibility has caused a boost in CSR activities. In fact, a company runs the risk of losing appeal to stakeholders and customers if it does not give back to society.
When we think about CSR, it is often associated with philanthropy-whether it is volunteering, donating or taking eco-conscious measures, it involves the intention and act of giving. Today, many companies are moving further away from this idea of CSR as charity.
First-hand experience from entrepreneurs is changing the common understanding of CSR today.
It is no longer an annual altruistic gesture but an increasingly important component of business strategy that is being integrated into the everyday running of several corporations.
Recent research suggests that more and more companies are adopting CSR approaches to help retain customers, ensure efficiency and stimulate innovation.
This has led to a paradigm shift of sorts – CSR can now be viewed as an investment rather than an expense, in a symbiotic relationship between company and community.
Engaging customers and employees
Publicity stunts and green washing (dissemination of dsinofrmation to present an environmentally responsible public image) have driven the public to become increasingly wary of the motive of corporate social responsibility activities, which places the onus back on companies to start being truly responsible.
By showing the community that you are serious about mitigating the adverse effects of your business on the people or environment, you are building a bridge of trust and acceptance.
After all, a satisfied customer tells three of four people while an angry customer passes the bad news on to 10 people.
Referrals by satisfied customers can do wonders for the growth of a company.
Retaining customers is just as crucial as recruiting new ones, and maintaining a solid client base is more plausible when social responsibility is exercised.
Global brand Nestle, for example, recognizes the importance of firstly creating long-term value for society in order to do the same for shareholders.
Through its Creating Shared Value approach, Nestle focuses on creating value for society in three areas-nutrition, water and environment, and rural development-which have the greatest potential and influence for joint-value creation.
“These areas are core to our business and it is also where we can contribute most to the society”, says Alois Hofbauer, region head of Nestle Malaysia and Singapore.
One of its water and environment efforts is Project RiLeaf, a reforestation and palm oil sustainability initiative in collaboration with Sime Darby Foundation.
The riverine Vegetation restoration efforts along the lower Kinabatangan River unites the needs of people, nature and agriculture to demonstrate how CSR can be an effort of mutual interest and co-existence for all stakeholders.
The project engages local community members and oil palm smallholders, strengthening the relationship between the company and the community it serves.
At the same time, Nestle is able to do its part in protecting the environment while building a respectable corporate reputation as a responsible member of the Round table on Sustainable Palm Oil.
Human capital development is yet another return of CSR. Nestle, for example, seeks to foster a holistic approach to work with its employees through promoting social responsibility.
An important message is conveyed to employees-their skills and contributions not only benefit the company, but also society as a whole.
Their jobs then start to have a deeper meaning and become more relatable on a human level. It becomes less about a pay cheque and more about working together to accomplish something that could create a positive change.
This builds character beyond the workplace by allowing employees to experience the full impact of their participation in the organization while building healthy corporate culture.
Corporate culture has a direct impact on how individuals make decisions affecting all aspects of managing a corporation.
Ultimately, employees and customers want to work with a company they respect-this respect can only be earned if a company acts with transparency and responsibility.
Spearheading innovation and sustainability
CSR is closely linked with the principles of sustainable development, calling on corporations, calling on corporations to consider the social and environmental consequences of their activities instead of putting profit-making first.
Society expects companies to be good corporate citizens and with the expedient nature to information transfer today, are able to identify companies that fail to address their social responsibilities.
Businesses that create and carry out effective CSR initiatives are not just being philanthropic; they are being smart.
With the increasing significance of the “people, planet, profit” triple bottom line, being socially and environmentally conscious is vital in today’s competitive climate.
Companies have found that incorporating sustainable measures in their business and products spur innovation and end up benefiting the company on a larger scale while also reducing costs by allowing them to operate more efficiently.
Keeping affordability, accessibility and social value in mind when designing products can result in a competitive advantage for companies, proving that sustainability is not merely a buzzword but a viable business strategy.
Customer feedback can also be beneficial to product or service improvement. Taking the needs of lower income customers into account can generate product improvements, which could benefit the target market as a whole, yielding returns that profit the company as well.
There are many ways of practicing social responsibility, and companies that do it right are able to benefit from the way it can drive businesses forward.
Integrating green features into products and services has long been one of the more popular CSR efforts but companies are now exploring fresh ways to make their businesses more environmentally friendly.
Fuji Xerox Asia Pacific, for example, has attempted to considerably reduce its carbon footprint by moving its headquarters to a new green office in Kuala Lumpur.
“In order to continue our CSR activities, we must be a strong company from the financial viewpoint as well,” says Yoshio Hanada, president of Fuji Xerox Malaysia.
He acknowledges the symbiotic nature of CSR, saying, “Strong XSR participation supports the company in terms of brand awareness and understanding corporate attitude, while improving financial results”.
Maximising impact to match needs
Tandemic is an enterprise dedicated to innovation and social change by engaging various companies in building impactful CSR strategies that address social challenges.
Chief executive officer Kal Joffres believes there are certain approaches to maximizing the benefits of CSR to both company and community.
“The biggest impact happens when a company adopts and organization for two to three years-getting to know them and their challenges well and implementing a whole set of different projects to help them grow,” says Joffres. Companies that focus their CSR initiatives by investing for the long term maximize potential impact on the society they serve.
“We need to move beyond building good brand image as a motivation for CSR,” adds Joffres.
“Instead, try to look for real business benefits from doing CSR. For example, a volunteering opportunity can serve as team building. A technology company’s prototyping workshops inspire underprivileged teens to get into electronics and they become potential employees.”
Companies have much to gain from intelligently practicing social responsibility, which, considering all the returns, is less of an obligation and more of a smart business move.
The best approach to CSR, however, is still to give earnestly. Joffre’s believes it all goes back to the original intention.
“These CSR initiatives cannot be thinly veiled approaches to selling products.
“Instead, they need to be grounded in the belief that if we help people broadly, some of it will come back to us.”