Chairman of Ford Motor Company, William Ford Jr. once said, “social obligation is much bigger than supporting worthy causes. It includes anything that impacts people and the quality of their lives.”
Corporate Social Responsibility (CSR) is what is changing those impacts and the quality of people’s lives. It is now being used more and more in the heart of the business strategy. This includes its HR strategies, marketing strategies as well as the thinking behind investor relations.
There are still sceptics, there will always be – but the changes and significance of having a CSR program implemented for many organisations globally, is huge. The variation of transparency on environmental and social commitments, waste management (not just physical waste but power etc) all the way to employee engagement to bringing about massive social change is what makes CSR sexy.
There are points which CSR covers across the board that affect daily running and optimally the strength of companies. To start off with CSR is important for human resources (HR). Why? And who says so? Some HR Managers would argue they already do plenty towards CSR in the company such as employee wellbeing and volunteer programs, so what makes sustainability any different?
To attract and retain the best employees, organisations have to be the best. Employees are very conscious of their own employee brand. They don’t want that “damaged “by a tainted organisation or company brand. The best organisations today are those that are innovative, fun, safe and are impacting the world in a way beyond themselves.
So what about employee engagement and retention? Surely that is a basic connection between CSR and HR?
Without happy and encouraged employees, you struggle to find a happy, fulfilling workplace. The CSR programs and initiatives set up have a huge role in both how staff feel about the company and its schemes and also, whether it is portrayed through staff productivity.
This is particularly apparent for new graduates heading into the workforce who are now on the lookout for these sustainable, transparent organisations. Many are even willing to take a cut in pay, for a company that would encourage volunteering and have a positive environmental footprint. A stat from Harvard Business Review in 2011, stated that –
“88.3% of graduating MBA students said they would take pay cut to work for firms that have ethical business practices, and the average amount they’d forgo is $8,087, according to a survey of 759 students in North America and Europe.”
NetImpact also recently completed a study across all generations, and found many of the ‘new generation’ millenialls expect to make an impact through their work.
This brings out a new trend called ‘impact careers’ – which is simple terms means making positive social/environmental differences through one’s work. A motion not commonly associated with previous generations of workers.
Generation Y, particularly those with a college education, have been taught throughout their lives to think globally. They are instilled with feelings of becoming a world citizen. This is particularly enforced by technology such as the internet, social networking and increased global mobility.
But although the internal dealings are important, the stakeholders and external interests cannot be forgotten either.
Investors are constantly putting up their money behind organisations that participate in ethical behaviour in their business practices.
Particularly areas such as alcohol, tobacco, gambling or weapons manufacturing are typically avoided – unlike what was reported in Jakarta Post last month reporting tobacco firms targeting minors via CSR programs!
For the most successful and effective corporations, CSR is now a major consideration of overall strategic planning. It affects many aspects of the corporation’s life: its people, consumers, suppliers and investors – prime example of the BP oil spill in 2010 in the Gulf Coast. Now three years on, BP has spent around $150 million into promotions to help recover the region – with a very large positive impact being made on residents and local businesses.
As many organisations do not yet get this concept, implementing these practices will ensure responsible and socially aware corporations are ahead of the curve in HR strategies, marketing strategies as well the relationships with investors and will be around for the long haul. Knowledge is no longer power; responsibility is.