By Asim Hafeez, Owner & Operator — Empower Energy Solutions
Many entrepreneurs reach a stage in their success where they have the opportunity to use their business as a force of good. This trend, which is becoming increasingly popular among large corporations and small businesses alike, is called corporate social responsibility (CSR).
If done correctly, a business’s attempts to make a positive impact on the community could also have a positive effect on its bottom line. However, consumers are savvy and can tell when a company is serious about its impact and when it is only chasing clout.
Understanding corporate social responsibility initiatives
Corporate social responsibility is a wide-encompassing term describing how a company holds itself accountable for its impact on the community — on a local, national, and sometimes even global scale. CSR initiatives can take many forms, from advertising campaigns to charitable activities and internal strategies to help the organization reach its goals and promote its mission.
The most obvious benefit of a well-executed corporate social responsibility campaign is a boost in public goodwill towards the brand. One study found that 82% of consumers consider whether a company’s values align with their own when making purchases, and McKinsey & Co. even reports that products that make claims related to their values showed higher growth rates than those that did not.
Considerations to make with a CSR initiative
One of the more unexpected impacts of a strong CSR initiative is a boost in employee morale. According to one survey conducted by LinkedIn, 82% of employees reported that it was important to them that their company and its culture align with their values. Other evergreen studies report a positive correlation between successful corporate social responsibility and employee satisfaction and engagement.
Although some brands may be tempted to stay silent in the face of social issues, fearing a misstep or believing that the issues are not relevant to their business, this assumption is often inaccurate. While it may not seem like women’s rights matter to a company, leaders should think about their employees. For example, if female employees see their employers remaining silent in the face of legislation that could be perceived as harmful to women’s rights, they could grow frustrated and disillusioned.
At the same time, businesses must be careful with their corporate social responsibility campaigns, ensuring they emphasize authenticity above everything else. An inauthentic CSR campaign could backfire, having more of a negative impact than the potential positive outcome it could have inspired.
For some brands, a lack of authenticity and foresight has caused a public outcry of “performative activism.” Many brands have received backlash for being opportunistic and not putting their money where their mouths are to support the causes they claim to back. For example, while Facebook and Meta founder/CEO Mark Zuckerberg has consistently claimed his commitment to upholding the integrity of user privacy on these platforms, his company was fined $5 billion by the FTC after data breaches were revealed in 2018.
How to be successful with corporate social responsibility
For businesses wondering how they can implement a successful corporate social responsibility campaign, here are a few tips:
- Make corporate social responsibility fundamental: The brands that most successfully take advantage of CSR campaigns make activism an essential part of their identity. Just look at the shoe company TOMS, which was created with a “One for One” model where they donated one pair of shoes for every pair purchased. Although the company has since switched to a model where it donates a percentage of its profits, giving back to the community has long been an important part of the brand’s identity.
- Make the biggest impact possible: Brands would also be wise to pick causes that stand to make the greatest possible impact. For example, a company could donate a portion of its revenue to a cause like the Himalayan Cataract project, where each donation of $25-50 provides someone with life-changing surgery. That way, if a company were to donate $25,000-$50,000,000 total each year, it could improve the lives of 1,000 people in need, leaving a lasting impact that spurs others to follow suit.
Brands that use their business as a legitimate source of good can reap benefits even beyond the positive impact they make on the community. However, the critical factor in the success of a corporate social responsibility campaign is authenticity. If it is clear to consumers and employees that the business is acting in good faith and not just performing to earn goodwill, the reputational benefits of a CSR initiative could be profound.
About the Author
Asim Hafeez is the Owner and Operator of Empower Energy Solutions, a company with over 200 million in revenue to date. Born in Pakistan, he moved to the US at 10 years old, knowing no English. He started in performance-based pay at 18 years old, was managing several thousand people by 21 years old, and has managed over 10,000 people in various roles throughout his career. His comments have been featured in AOL, SHRM, and Startup Nation.