In this episode, we answer the question of what is corporate social responsibility (CSR)? You'll learn why it's important and the benefits for modern businesses. We explore the history, how CSR programs operate and elements to success.
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In this episode, we discuss the fundamentals of corporate social responsibility, including what it is, what it means, what are the benefits and how to start one for your business, including some great examples and we're starting right now.
So today I'm joined by in-house goodness consulting expert, Nicole Campbell and the topic we're going to discuss is what is corporate social responsibility?
So Nicole, can you give me maybe a little bit of a history on what corporate social responsibility is and what it actually means?
What Is Corporate Social Responsibility?
Hi, Karl. So nice to be here. Thank you for having me. So [00:01:00] CSR is one of my favourite topics, I could talk about it all day. Fortunately for you, I won't be.
But CSR, you might have heard of it being referred to a lot of different things, maybe social impact, philanthropy, community investment and that's because CSR or corporate responsibility looks different for every company and there's a reason for this.
It's certainly evolved over time and we'll get to what a high performing CSR strategy looks like a little bit later, but [00:01:30] to give you a bit of a history.
CSR in the 1950s
It started in the 1950s, and it was this idea of philanthropy that emerged.
It started in the 1950s and the idea of philanthropy emerged with... It was basically wealthy families donating [00:02:00] large sums of money to causes that they believe are critical for societal health.
So it was generous, but it was really reserved for the rich and then the idea extended to companies not long after.
So businesses felt like they had an obligation to ensure that they weren't harming the communities that they served or operated in and so it was more of a social license to operate than really anything else and then there were brand benefits that were seen from that. [00:02:30]
United Way Model
So, then comes the United Way Model, which a lot of you may have heard of. It introduces fundraising approach where employees were brought into the fold.
It was really great to have these annual campaigns that brought in employees to give back, but the approach was a little bit top down and so from our perspective, it wasn't really as engaging.
It could arguably be disengaging, and has lagged since, in terms of driving positive social outcomes and change in recent years.
So we move along to cause marketing, [00:03:00] and this is where brands were essentially recognized, the consumer value of doing good.
So you started to see things like one for ones, like Toms Shoes pledge 1%.
So then we get to the modern programs that had really taken off in the last decade and these ones that are empowered and they're authentic and they truly engage people in a personal sense of meaning.
Whether it's donation matching to [00:04:00] any cause that the employee cares about, or even extending onto consumers and partners.
Volunteer awards to any cause and giving money to those people who actually go out and volunteer their time and allowing their people to actually extend that impact into their friends and family.
So the landscape now is often focused on the individual and the ability for them to make an impact in the way that resonates most with them and this is fast becoming the status quo with more companies embracing this [00:04:30] sort of personalized approach.
Is that sort of answer your question on the history?
It does, and I think I want to follow that up with... So I'm pretty new to this space and when you mentioned it's focused on the individual, I am starting to see, is it more the individuals in organizations or is it corporations telling the individual?
I think that question is multi-pronged because more so like, think about the generations too, [00:05:00] right?
You got the Generation Z and the younger Millennials that are kind of demanding that accountability, not just from the brands they buy, but the brands they work for.
Who drives CSR programs?
Yeah, that's a really great question and I guess this steps back to what I was saying in the beginning, every company's definition of CSR is a little bit different, and it depends on where they are in that journey that I just talked about.
Some are still sort of shifting some of those more dated models and what they're solving for.
So a lot of CSR [00:05:30] programs, in addition to doing well by doing good and seeing the brand benefits of designing a solid program are really designing this from an employee engagement perspective.
50% of the workforce is going to be made up of those younger generations and 70% of those, according to a Deloitte report, said that they would take a 30% pay cut to work for a company who has social value.
So you have your future [00:06:00] talent, you have your consumers demanding that you're operating in an ethical and authentic way.
It's not the same as it used to be as well with CSR reports.
People reporting out on the money they're investing if it wasn't done in an authentic way.
People expect it to be real, both your talent, both your vendors and partners as well as boards now have a fiduciary duty to actually report out on these authentic practices too.
So, these stakeholders to your point go far beyond even just the [00:06:30] individuals that are working for these companies, but to a lot of different stakeholders.
And I think that goes into my next question and I know you kind of answered it where, why is it important today?
Why is corporate social responsibility important today?
There's a lot of whys behind this and part of it is just the world around us.
Now, there's a lot of shifts in trust,
Consumer trust and public trust is at an all time low right now, according to an Edelman report and one of the actual trusted institutions where people see this group can actually drive change are businesses.
[00:07:00] So businesses have this expectation to respond to the mass movements like Black Lives Matter or huge environmental issues like even the fires are happening in California.
So the need is really there and then the expectations that go along with that. So the people expecting these companies to take a stand and drive forward this change and also engage them in that process.
[00:07:30] So, that alongside some of the other things I've touched on around engaging and recruiting and attracting talent would be some of the biggest drivers I'd say for why CSR is becoming increasingly important.
So just following up the question on importance.
What are some of the benefits of corporate social responsibility?
from both the individual level and the brand or company level?
Yeah and I think it could even extend beyond that.
So a really well designed strategy, there [00:08:00] should be at least four stakeholders:
So, you have the business where you can see benefits across the entire organization. Everything from the people team for attracting and retaining talent, as one quick example of this.
We know that from a study that we did turnovers reduce by 57% for employees who are actively engaged in their company's giving or volunteering efforts.
So just as one example, and if you're looking for more of those, we'll probably be talking about those later in some further [00:08:30] episodes.
Then we think about development from the people team.
From a Deloitte study, 92% of respondents said that it actually improved their professional skillset, 92% thought that volunteering could actually help them improve their leadership skills as well and be more likely for promotions within the company.
From a profitability standpoint and within the organization, they have 22% higher profitability a 10% [00:09:00] higher customer ratings and 48% fewer safety incidences than their peers and that's according to the Gallup.
So that perspective, there's huge benefits.
What surprised us in addition to all of the obvious but benefits of giving back, one of the reasons a large cohort of their people were getting involved was because they wanted to role model pro-social behaviors to their kids and they wanted their kids to feel proud about what they were doing in their jobs.
So a lot of kids didn't [00:09:30] really understand what mom or dad actually does from a day to day but they can understand that their company allows them to go back and give back to the community.
So I thought that was a really interesting one and then from another stakeholder group, thinking about those not-for-profits that are getting these supports and the communities that they're affecting as well as even additional stakeholders like partners and consumers that can be positively impacted at scale.
When you think about all of the people [00:10:00] around the world that are hardwired to do good businesses, arguably in my opinion, have the largest potential influence to actually create change more than almost any other institution out there.
So, the benefits are huge and all encompassing if it's done right.
I know you talked about, within the business, certain departments like human resources, just starting to understand this industry.
Is it just human resources, communications that owns the corporate social responsibility program, or is it like more of widespread?
Who leads/drives CSR in a business?
The groups in which CSR reports into [00:11:00] is actually changing and historically I think they were just thrown into whatever business unit had the budget.
And that's, again, another reason why some of these programs amongst different companies are still incredibly different because depending on what business unit they report into, the why behind these programs change, just because the justification to have it in the first place.
You see them sometimes in human resources, which I think is an excellent place, especially if you are solving for employee engagement and trying [00:11:30] to scale some of these efforts through your people but sometimes it's not where the budget come from, comes from.
So if you are a brand new CSR professional, or you’re trying to re-imagine it within your organization, I honestly think the best spot to be is a direct line to even your CEO or a really direct governing.
Sometimes it's a board of directors from a foundation, every company is a little bit different, that allows you to have more [00:12:00] influence over your programs to make decisions a little bit easier.
If you have a bunch of layers or you're sitting in a business unit that doesn't necessarily make sense, if you're sitting in say finance or legal, you might not be able to solve for your employee programs the same way you would if you were reporting to the CEO or within human resources.
So it's definitely something to keep in mind, other groups that are pretty common, you see public affairs, community affairs, marketing [00:12:30] or communications, sometimes finance and legal because some companies had their programs in existence because of that license to operate and their requirement to actually give back a portion of their foundation money.
So it really differs depending on where you're at in your CSR journey.
Who decides corporate social responsibility strategy in a business?
So I guess to follow that up, so you mentioned strategy, so who decides that strategy in an organization when a corporate social responsibility program is started, is it the CEO [00:13:00] or the executive team or the leadership team or is it more like grassroots?
I've seen both and it's really great when it's a both and, but if for instance, you're in a company where sometimes it's when a new CEO comes in or someone on the executive or C-suite team says, Hey, I came from X company and we were doing all of these things.
Why aren't we doing them here, so often we'll see that and that's a really great spot to be because you already have that executive buy-in and a lot more ability to [00:13:30] influence and design these programs.
Ultimately though they don't have in most cases a CSR expertise, it's really up to you to create a coherent strategy, or if you're a director or head of a foundation or anyone that's trying to take this charge to present to them and that's a whole different conversation of how you actually get that executive buy-in.
But then sometimes, like we talked about before, you hear people have these expectations of their employers and so in a lot of cases, it's coming from the bottom up.
They're hearing [00:14:00] it in employee surveys or just in focus groups and things like that and so that sort of flurry of activity can drive the change.
But typically from the top down is where you'll actually start to see these programs put into place because they aren't cheap and the company has to be willing and interested in investing in it and seeing that the value in it but if you are trying to design this, the both end works.
And that if your executives are at least somewhat interested, you can demonstrate [00:14:30] the need from the business by actually talking to employees and get them getting that feedback as a way to get that support and buy-in.
Examples of successful CSR programs
So just to follow up from who decides the strategy, maybe you can give me some examples of what a good CSR program looks like?
That's a great question and you know, my role, I am so fortunate to work with a lot companies, so sorry for the cheesy analogy, but I've really seen under the hood.
So I'm going to get [00:15:30] back to that and so that's a question that I'm asked a lot and fortunately, I've really seen sort of what works and what doesn't work and I think the components of our really good strategy are that one, it's authentic.
Like it needs to come from the top and there needs to be some authenticity around purpose and trying to do good. You can do well by doing good but without that sort of top level, buy-in, the rest is harder to follow.
Other components are [00:16:00] you are considering all of your stakeholders and you really know what you're solving for.
So, some companies have had CSR programs that just kind of flounder.
You need to treat this like a business priority. You need to have a lot of rigor around your strategy, that’s why you need to be continually reinforcing this message within your organization.
So others see the value so they can get behind it because once you have those top level champions, you're going to be getting [00:16:30] more budget, you're going to be getting more support and even more airtime and company-wide events.
So those pieces are really important. You really need to factor in all of your stakeholders, including your employees.
So if you have a CSR program that has an employee engagement aspect to it and you're not asking your employees what they actually care about, it's a moot point.
I don't even think, how can you engage your employees if you don't know what engages them?
So I always say, think of it almost like [00:17:00] the way that he designed that product or a service, you need to do your research.
You almost need to run focus groups to understand the difference between what someone says they care about versus what they actually care about.
There's disconnects there and as well, it needs to be designed for employees in the way that they have the choice and you're incentivizing that choice.
So they can give back to causes that are near and dear to them versus just company causes. You can have both that's [00:17:30] really important and you need to really incentivize and show your support through things like matching gifts programs, volunteer awards, grants.
There's a lot of ways that you can bring them into the fold that are really important and then lastly, you need to be able to scale this.
So in addition to having a strategy, in addition to having that buy-in and making sure that it's employee stakeholder focused, you have to automate, you need to streamline that stuff.
You need to have an, I know that I work for Benevity, but I was a client first when we brought in Benevity in.
So I feel [00:18:00] credible to say this.
You have to be able to scale it through technology and make it fun and gamified. I'd say those are some pretty important components there's times but if I were to simplify.
So those are good points. Do you have anything else to add?
Yeah, if you're a new CSR practitioner, give yourself, don't beat yourself up if it takes a little bit of time. Don't dust yourself off if the first person you've talked to doesn't support this, you can do it and you're [00:18:30] going to be awesome.
Question for you
What does Corporate Social Responsibility mean for you? If you've implemented a CSR program in your business what have been the impacts?
The Social Impact Show publishes new content weekly so check back regularly for the latest information, strategies and tips from CSR experts.
About Nicole Campbell:
Nicole’s passion for behavioral science plays a key role in her ability to help organizations manage and adapt to change.
Nicole has worked with companies of all sizes, industries, program varieties, and varying levels of executive support — and has had a hand in designing or growing Social Impact programs for some of the biggest brands out there. Her role, working with so many different companies, has provided her with a wealth of experience, data and anecdotes that have shaped a strong understanding of what works, what doesn’t and what’s next.