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Corporate Social Responsibility in Today's Socially and Politically Active World

April 02, 2021 Leadership
scott clark
By Scott Clark

Company culture and values stepped onto center stage in 2020. The COVID-19 pandemic, social and racial unrest, and political strife forced companies to take a public stand for the values they espoused.

Corporate social responsibility, or CSR, is one way organizations publicly acknowledge their operational values and beliefs. 

CSR statements can include a commitment to diversity, equity, and inclusion, reducing environmental impact, increasing community outreach, promoting sustainability, and the elimination of prejudice and corporate bias. Though consumers may not know the term CSR, they certainly recognize when a company doesn't stand behind values they espouse. That makes CSR a core part of business strategy in 2021 and beyond.

The Role of CSR in a Post-Pandemic World

It will take years to recover from the economic pain and fully assess the psychological impact of lockdowns, pandemic-related loss of life and social and political unrest. But it's fair to say that during a time of upheaval, consumers are looking to companies they trust to provide a sense of normalcy and stability. The way those companies treated customers, employees and the community over the last year will have a lasting impact on how they are viewed. 

“Surveys show that consumers will walk away from brands that don’t align with their values and, on the other hand, will gravitate towards brands that do,” said Sarah Kaplan, a professor at the Rotman School of Business at the University of Toronto, and director of the Institute for Gender and the Economy.

“The same can be said for workers. The Millennials, Gen Z and the new COVID ‘Gen C’ don’t want to work for companies that are associated with poor performance on corporate social responsibility.”

If the pandemic alone wasn’t enough to get companies to rethink CSR, the killing of George Floyd, an unarmed African American man, in May 2020 at the hands of a police officer in Minneapolis, Minn., pushed some off the sidelines. Many companies issued statements of solidarity with the Black Lives Matter movement and the fight against racism. 

Then came the 2020 presidential election and the ensuing chaos that resulted in the storming of the U.S. Capitol on Jan. 6 by supporters of the former president. Again, many companies issued statements denouncing the violence that took the lives of a police officer and four of the rioters.

“Companies need to be public about the ways they are addressing climate change, social inequalities, pollution, and so on,” Dr. Kaplan said. “The risk for companies is that, if they don’t back their statements up with real action, they will be accused of ‘greenwashing,’ ‘pink washing,’ or ‘purpose washing.’”

A report from AdAge revealed that half of the consumers polled said that they favor companies that condemned the Capitol riot, and 43% said they would be more likely to purchase from brands that do so. Clearly, consumers care about the values of the companies they do business with. That puts corporate marketers in a unique place, with the ability to challenge and shape people’s perspectives, said Tasha Reasor, vice president of demand generation and customer marketing at Iterable, a cross-channel marketing platform provider.

“We can raise awareness about social issues, take a stand on environmental policy, shift perceptions and change attitudes,” Reasor said. “And we are aligned with the evolution of CSR which has over the last few years transformed from solely being about community outreach and volunteerism to focusing more on ways organizations can be socially, politically, culturally and environmentally accountable for their stakeholders and the greater community.”

Related Article: Get Reworked Podcast: Why a Clear Organizational Purpose Is so Important

CSR Initiatives on the World Stage

CSR isn’t just another policy. Rather, it’s a statement about how a company makes the world a better place. Some are taking CSR to a higher level through initiatives that have an impact in communities, nations and the globe.

Cognizant, a multinational technology company, announced a new $250 million corporate social responsibility initiative in February 2021 to support equitable education, economic mobility, health and well being, and diversity and inclusion. The initiative will provide opportunities for employees to volunteer, additional relief funds for COVID-19, and create new programs to advance diversity and inclusion. 

They're not the only company to jump in. Anjelica Cummings, manager of social innovation programs at SAS, said customers and potential employees want to work with companies that are attuned to global issues and are making active contributions to a more sustainable future.

“We see CSR as the opportunity to participate in building a better world — by using our own technology and embracing employees’ passion for meaningful work,” said Cummings. One of the ways SAS, an analytics software company based in Cary, N.C., supports this goal, she said, is through the Data for Good movement, which encourages the use of data to solve humanitarian issues around poverty, health, human rights, education and the environment. 

For example, SAS' GatherIQ app invites the global community to engage with the United Nations 17 global goals to make the world a better place by 2030. SAS analytics volunteers worked to help NatureServe analyze biodiversity data and boost healthy bee populations.

Customer demands for more authenticity and transparency from companies, as well as the desire for ethical alignment to their values, has given companies the "green light" to use their influence for good, Reasor said.

"If organizations aren't using this opportunity to stand for something, and lead with their authentic selves, they’re missing out on impact,” she said.

Related Article: What Corporate Social Responsibility Looks Like in 2020

More Robust Guidelines for CSR

In 2010, the International Organization for Standardization, an independent, nongovernmental organization established in 1946 to develop industry standards, and a working group of 500 experts created ISO 26000 to clarify the meaning of social responsibility and help businesses and organizations translate their stated principles into actionable insights.

ISO 26000 is different from other ISO standards, in that it provides guidance rather than requirements, but it lays out seven core areas of social responsibility: 

  • Organizational governance
  • Human rights
  • Labor practices
  • The environment
  • Fair operating practices
  • Consumer issues
  • Community involvement and development

Additionally, ISO 26000 is based on seven principles of social responsibility:

  • Accountability
  • Transparency
  • Ethical behavior
  • Respect for stakeholder interests
  • Respect for the rule of law
  • Respect for international norms of behavior
  • Respect for human rights

ISO 26000 is not in and of itself a blueprint for CSR, but is more of a guideline that companies can use when developing their own CSR. 

Related Article: Build Organizational Purpose Into Your Talent Systems

Which CSR Goals Should Your Company Embrace?

The first priority of a CSR initiative is to strategically align with corporate strategy and the business model. Companies have to be able to demonstrate that CSR has real value to customers, employees, shareholders and the community. 

Along with ISO 26000, many companies use the United Nations Sustainable Development Goals to map out CSR targets to address poverty, inequality, climate change, environmental degradation, peace and justice. Sustainable development goals (SDGs) are a way to examine opportunities and risks, translate the impact of investment activities into economic outcomes, and meaningfully engage with shareholders.  

In February, the United Nations announced the SDG Ambition Accelerator, a program aimed at accelerating business performance on SDGs. Industry representatives will be invited to assess current performance, risk areas and new opportunities with outcomes from the initial round of the Accelerator presented at the UN Global Compact Leaders’ Summit in June 2021.

Supporting a cause that aligns with company strengths, research and knowledge, much as SAS does with data analytics, allows a company to capitalize on its core competencies as it contributes to society. It also recognizes the issues that matter most to customers and employees. Customers are loyal to companies whose values they agree with and employees are more likely to be satisfied and stick around when they are proud of their employer.

“In the 21st century, companies cannot only be driven by a blind allegiance to the bottom line without considering the impacts on all of the people and groups impacted by their operations,” Dr. Kaplan said.

Flexibility also needs to be built into CSR initiatives because events that need to be addressed can occur at any time. Natural disasters, social and political unrest, terrorist attacks, accidents and pandemics do not follow a regular schedule, and companies must be able to change course or prioritize actions in response.

By continually addressing the social issues important to customers, companies are able to build trust and loyalty, the core of a successful business strategy, Reasor said.

“Building faith grows consumer personal and financial investment in the long term," she said. "To build this trust, companies need to ensure that everything they do is consistent to external promotions. From recruiting to revenue reporting, from CSR initiatives to mobile marketing plans, meaning and messaging need to be aligned.”

The events of the last year demonstrated the need to be socially aware and actively play a positive role in the lives of employees, customers and the world at large. CSR provides companies with the opportunity to publicly commit to making viable changes on the issues that matter most to customers, employees, shareholders and the community.

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