Guide to Corporate Social Responsibility

In most companies, the Corporate Social Responsibility (CSR) department is one that is not taken too seriously because it is seen as a drain on the resources of the company. It is seen as the “feel good” or “tree hugger” department that is there because legislation requires it (Executive Order 13693, https://www.whitehouse.gov/the-press-office/2015/03/19/executive-order-planning-federal-sustainability-next-decade). Even if a company does not subscribe to the government’s global targets, it still has a responsibility to implement a version of CSR. But business is driven by profit and many companies cannot see the benefit on their bottom line of having CSR initiatives. The benefits of CSR programs are generally seen as intangible but they can easily be quantified.

CSR can generally be seen as the moral policeman of a company. It guides the ethics with which companies operate with particular focus on proper governance, transparent business dealings, zero tolerance to corruption, human rights (beyond that of employees), and care for the environment.

Transparency: This is one of the pillars of CSR and involves complete transparency in business dealings, together with a policy of anti-bribery and overall anti-corruption.
Human rights: Labor relations have expanded to include forced labor (slavery), child labor, male/female employment proportions, workplace conditions, and employment rights of indigenous people.
Environmental care: Visible and public displays of environmental policies go a long way towards increasing and maintaining corporate identity with figures estimated to be around 79% increase.
Shareholder value: With the increase in awareness of the importance of corporate governance and environmental management, shareholders demand better value for their money. Publicly listed companies have to conform to expectations if they are to attract high-value shareholders.

Studies have shown that the direct financial impact of a solid CSR program can improve staff quality by about 61%, decrease costs by around 42%, with a spread of between 3% and 39% increase in new market opportunities and improvement in market strength.

Right across the world where companies voluntarily implement good CSR initiatives, talented employees stay with the company longer whilst new graduates seek these companies to work for. Those companies who create environmentally friendly buildings also improve the working atmosphere which in turn creates a happier workforce. A happy workforce is also unlikely to become involved in industrial action when there is no real reason, as seen with so many other disputes.

In addition to these figures, when a company implements a good CSR program, their ISO 14043 rating improves dramatically. This is probably the easiest to quantify in terms of money because it has a direct impact on sales/income and the bottom line.

One must remember that as with all intangible benefits, the effects of a good CSR program cannot be seen immediately. Therefore it is important not to assume failure before the programs have had a chance to show success.

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