Module-5: The Need for CSR

 Key issues in CSR according to UNIDO are environmental management, eco-efficiency, responsible sourcing, stakeholder engagement, labour standards and working conditions, employee and community relations, social equity, gender balance, human rights, good governance, and anti-corruption measures.

 These issues can be represented into three dimensions from the angle of emerging economies as follows:

• Labour Rights: Child labour, Forced labour, Right to organize, Safety and health.
• Environmental conditions: Water & Air emissions, Climate Change, Human Rights, Cooperation with Paramilitary Forces, Complicity in Extra-Judicial Killings.
•  Poverty Alleviation: Job Creation, Public Revenues, Skills and technology.

 

Why CSR is aggressively needed today?

 "Social responsibility," in simple terms, means a business’s obligation to pursue achievable and good long-term goals for its people and the world at large.

Companies today that use social responsibility as a way to give back to society and thank customers for their loyalty. This can come in the form of projects, movements or empowerment of individuals. Whatever form these corporate ventures take, they are definitely a win for both the company and the community alike

Key issues in CSR from the angle of developed economies take a different form from that of developing economies as given below:

1. Changing Social expectations: Consumers and society in general expect more from the companies whose products they buy.

2. Increasing Affluence: This is true within developed nations, but also in comparison to developing nations. Affluent consumers can afford to pick and choose the products they buy.

3. Globalization: Growing influence of the media sees any mistakes by companies brought immediately to the attention of the public. 

Potential businessbenefits of CSR

1.      Human resources: A CSR program can be an aid to recruitment and retention, particularly within the competitive graduate student market. Potential recruits often ask about a firm‘s CSR policy during an interview, and having a comprehensive policy can give an advantage.

This shows how important employees take social responsibility. CSR efforts also help foster a more productive and positive work environment for employees. It promotes volunteering and positive efforts from employees.

It can improve innovation and collaboration within businesses

• When employees engage in social good activities, it is proven that they become more innovative and collaborative.
• A lot of skills can be developed when taking part in any kind of CSR activity and beyond this, employees are able to learn about potential clients, develop their communication skills, improve leadership and gain invaluable local insights.
• In turn, these new skills can develop within the workforce and allow the company to flourish within its market. If the employees are happy, their work will be of a higher quality.

Here we looked at the importance of Embedding Sustainability in Corporate Events, but it is clear that CSR is a concept that must be addressed at all levels of business and should form part of a company’s key driving strategy.

Greater employee engagement. Similar to customer engagement, you also need to ensure that your employees know your CSR strategies. It’s proven that employees enjoy working more for a company that has a good public image than one that doesn’t. Furthermore, by showing that you’re committed to things like human rights, you’re much more likely to attract and retain the top candidates.

More benefits for employees. There are also a range of benefits for your employees when you embrace CSR. Your workplace will be a more positive and productive place to work, and by promoting things like volunteering, you encourage personal and professional growth. 

 2. Risk management: Managing risk is a central part of many corporate strategies. Reputation as take decades to build up can be ruined in hours through incident such as corruption scandals or environmental accident. These can draw unwanted attention from regulators, courts, governments & media. Building a genuine culture of doing the right thing within a corporation can offset these risk.

 3. Brand differentiation: In crowded marketplaces, companies striving for a unique selling proposition. That can separate them from the competition in the minds of consumers. CSR can play role in building customer loyalty based on distinctive ethical values.

Improved public image. This is crucial, as consumers assess your public image when deciding whether to buy from you. Something simple, like staff members volunteering an hour a week at a charity, shows that you’re a brand committed to helping others. As a result, you’ll appear much more favourable to consumers.

Increased brand awareness and recognition. If you’re committed to ethical practices, this news will spread. More people will therefore hear about your brand, which creates an increased brand awareness. 

4. License to operate: Corporation are keen to avoid interference in their business through taxation. By taking substantive voluntary steps, they can pursuit governments that they are taking issues such as health & safety, diversity, or the environment seriously as good corporate citizen for positive impact on the environment.

• Cost savings. Many simple changes in favour of sustainability, such as using less packaging, will help to decrease your production costs.
• An advantage over competitors. By embracing CSR, you stand out from competitors in your industry. You establish yourself as a company committed to going one step further by considering social and environmental factors.
• Increased customer engagement. If you’re using sustainable systems, you should shout it from the rooftops. Post it on your social media channels and create a story out of your efforts. Furthermore, you should show your efforts to local media outlets in the hope they’ll give it some coverage. Customers will follow this and engage with your brand and operations.
• Greater employee engagement. Similar to customer engagement, you also need to ensure that your employees know your CSR strategies. It’s proven that employees enjoy working more for a company that has a good public image than one that doesn’t. Furthermore, by showing that you’re committed to things like human rights, you’re much more likely to attract and retain the top candidates.
• More benefits for employees. There are also a range of benefits for your employees when you embrace CSR. Your workplace will be a more positive and productive place to work, and by promoting things like volunteering, you encourage personal and professional growth.

Thus the benefits for any corporate following CSR  could be summarized into the six dimensions

•       CSR helps in strengthening the relationship between companies and stakeholders.

•       It enables continuous improvement and encourages innovations.

•       Attracts the best industry talent as a socially responsible company.

•       Provides additional motivation to employees.

•       Mitigates risk as a result of its effective corporate governance framework.

•       Enhances ability to manage stakeholder expectations.