‘Corporate Social Responsibility’ is a clunky term at best. Often relegated to the sidebar of a sidebar on a company’s website, it is commonly treated as a corporate obligation. The importance lies not in the doing, but in the being seen to do. CSR can broadly be defined as a company’s interaction with the community and environment in which it operates. However, it rarely outlives the odd bake-sale, company raffle and the inexplicable individuals willing to run marathons.
The logic behind this limited approach is not difficult to understand. With increased pressure on profits, businesses are streamlining. ‘Doing good’ appears a distraction from ‘doing well’. Businesses are driven by customer behaviour. If businesses are going to pursue motivated and responsible change, they need to know, do consumers care?
In short, yes.
A 2011 report reveals that 40% of a company’s reputation is determined by its purpose, and 60% by its performance. Clearly customers see companies as more than the sum total of their products. Customers must be confident in what a company stands for – the purpose behind the product.
The History of CSR
For CSR to succeed, we need to go back to the beginning. Acting with empathy was not born with the phrase ‘CSR’. If anything, the birth of marketing has diluted the philanthropic commitment of early 19th century innovators, such as Colman’s Mustard. Founded in 1814, Jeremiah Colman made his factory an ethical ecosystem, introducing housing, healthcare, education and retirement schemes. His impact was so profound that his funeral brought Norwich to a stand-still, with 1,500 workers following the hearse on foot. William Lever’s Port Sunlight and George Cadbury’s Bourneville Village centred around similar reforms. All three companies were grounded in doing good; their radical welfare provisions were inseparable from the business as a whole.
Contrast this practice with the first CSR report, released by Shell in 1998. It came at a time of crisis for Shell, following controversy surrounding the Brent Spar oil platform and the execution of activists in Nigeria. The report formed part of a £20 million PR offensive to rebuild its reputation. The title – ‘Profit and Principles: Does there have to be a choice?’ – seems painfully ironic considering the sudden appearance of the latter in the hope of protecting the former. Businesses must move beyond marketing manoeuvres, and back to the original motivations for change.
For Now & The Future
How long will companies get away with the bare minimum? As Generation Y grows up, their expectations will force businesses to evolve. The ‘Born Green’ generation has been taught sustainability since school. Their eco-consciousness is ingrained. Ethical behaviour must become more than a branding ploy; it must become the central ethos around which a company revolves. The rise in social media limits companies’ monopolies on their image; green-washing will be easily revealed. Transparency, honesty and depth are all integral to creating CSR campaigns, which not only survive, but thrive, on social media.
Companies must also look internally for the possibility of enhancing equality. A diverse workforce is an increasingly attainable goal, with companies such as Rare Recruitment working to remove the prejudice ingrained in the employment process. Furthermore, with women earning on average over 14% less than men, women are demanding increased evidence of workplace equality. Companies with engaged employees experience 26% higher revenue per employee than their counterparts: the importance of a motivated workforce should not be underestimated.
Successful businesses emerge when passionate people, great ideas and creative drive come together. Solving social problems requires the same combination. The current ‘bake sale’ approach to social change is the lowest rung on the ladder of corporate responsibility. It fails to use businesses’ best assets: their skilful, creative employees. Taking photos beside over-sized cheques is not enough. Businesses can make meaningful change if they create a clear sense of purpose, and motivate their employees to get involved.
Companies Making a Difference
Several companies are pioneering this progress. Google’s ‘Made with Code’ initiative, launched in 2014, is a $50 million initiative to teach young girls how to code. Recognising the lack of visible role models for young girls in the tech industry, Google has partnered with all-girl coding groups to encourage female participation in technology. Google is using its role as a market leader to solve an industry-wide problem.
Toms has demonstrated the capacity for creative change outside of the service sector. Every product is linked to a social initiative. For every pair of shoes sold, another pair is donated to a child in need. For every pair of glasses sold, a person in need is provided with a full eye exam. For every bag of roasting coffee sold, a week’s supply of water is provided to someone in need. This ‘one for one’ approach is grounded in the entire ethos of the company; it cannot be separated from the business model.
However, it is not only companies with millions to invest that are showing ethical initiative. Hiut Denim embodies the potential for small companies to make seismic changes to their surroundings. Based in the Welsh town of Cardigan, their mission is to ‘do one thing well’. When the closure of Britain’s largest remaining jean factory in 2002 left one in 10 of the town’s 4000 people unemployed, Hiut Denim was created to bring manufacturing back. They used their business to bring about change, one pair of jeans at a time.
Every company, no matter how big or small, has the potential to become purpose-driven and have a powerful impact. Consumers increasingly care about the ethos behind their brands, making profit and purpose easily aligned. A social impact that doesn’t stretch beyond the occasional fundraiser is no longer enough. Companies must tap into the powerful resource of their employees, uniting them within a clear sense of purpose, which in turn can help many beyond the bounds of their business.
This post was written by our strategy intern, Kate Hodkinson,