The Benefits of Corporate Social Responsibility
by Tyler Garcia
The Walt Disney Company, Google, and Ben & Jerry’s are all well-known businesses, but what do they have in common? Although they operate in different industries, these three firms are lauded for the positive impact they have on the world through philanthropy, volunteerism, sustainability, and ethical business practices. These business practices fall under the term of corporate social responsibility (CSR). Not every business has a corporate social responsibility aspect implemented in their business because being socially responsible comes with added costs for the business. The benefits, however, far outweigh the costs. Firms of all sizes should develop and implement a corporate social responsibility into their business model because it benefits the firm, the consumers, and the world. Corporate social responsibility, also known as social impact, is a business model that helps a firm to stay socially accountable to itself, its stakeholders, and the world. In turn, the commitment to this business model improves the firm and the quality of people’s lives.
Businesses benefit from implementing a corporate social responsibility strategy through increased customer loyalty. According to Kimberly Lanphear, CEO of the nonprofit Apparo and guest contributor for the U.S. Chamber of Commerce Foundation, one survey found “66% of participants said they pay more for products and services from socially responsible companies. When examining the population of participants willing to pay more, 56% said “a brand being known for its social value” was a top purchase driver. Another purchase drive, “a brand with community commitment,” was marked by 53% of those will [sic] to pay more.” These statistics show that customers will be loyal to a firm if the company values are in line with their own. Loyal customers also promote a positive brand, which leads to an excellent reputation.
Corporate social responsibility fosters a positive reputation and brand image, marking another benefit of the model. Today, consumers expect more from the brands they choose to buy from. A business with a bad reputation for unethical business practices is akin to a death sentence in the business world. Ohio University explains that businesses who choose to ignore corporate social responsibility risk their brand and their image. They go on to say that having a bad reputation both socially and environmentally creates potentially serious negative effects on the profitability and success of the business because consumers are looking to spend their money on goods and services they believe in from companies that have ethical business practices and values they identify with. These statements spell out how detrimental it can be to ignore social and environmental issues as a business. Further evidence of how businesses with a social impact affect brand image and reputation comes from the 2015 Cone Communications Millennial CSR Study, which found that “more than nine-in-10 Millennials would switch brands to one associated with a cause (91% vs. 85% U.S. average)” (Cone Communications LLC). The evidence reveals that social and environmental issues matter to consumers and a company’s brand image and reputation can be easily affected by having a social impact element or not. A positive company reputation can also lead to hiring higher quality employees.
Companies having a CSR element doesn’t only matter to consumers but potential and current employees as well. A survey performed by the nonprofit Apparo in 2017 discovered, “organizations that encourage their employees to volunteer through pro bono work during paid business hours create motivated employees who feel that their company respects their development. These employees also feel energized by the opportunity to be creative with their skillset for a good cause” (Lanphear). Based on the survey data, it’s clear that employees enjoy working to benefit a cause. This is supported by Ohio University who discovered that seventy percent of millennials said a firm’s commitment to social responsibility was influential in their decision to work for the said firm. In another case, Tim Stobierski, a marketing specialist and contributing writer for Harvard Business School Online, found that “88 percent believe it’s no longer acceptable for companies to make money at the expense of society at large.” Finally, the 2015 Cone Communications Millennial CSR Study illustrates that sixty-two percent of millennials from the study were willing to take a pay cut to work for a firm they deemed responsible (Cone Communications LLC). All this data showcases a belief by employees that businesses should engage in corporate social responsibility. Ohio University puts it plainly, “Millennials don’t just want to consume products and services made by companies that have a CSR presence; they want to take part in making these social and environmental changes also.” The landscape has changed, and if companies want to hire the next generation of employees, they must embrace the implementation of corporate social responsibility to attract and retain talented individuals.
Consumers also receive benefits from the use and implementation of corporate social responsibility. Chastity Heyward, a Forbes council member, argues a huge benefit for consumers comes in the form of high-quality engagement with a business. Companies with a CSR that matters to their customers create a bond between them, one that is intentioned to make the consumer feel that the business cares about issues in the world. This bond can certainly create that customer-business engagement, leading to feedback from consumers on what the business is doing well and what they could continue to improve on. This feedback not only helps the business become stronger, but it can result in better experiences for customers in the future. According to Heyward, positive interaction is critical, and “customers who have been part of the social responsibility created by a company are able to tell other potential customers about the business.” This is a benefit to consumers because they can potentially influence new customers to buy goods and services from the business, leading to a greater impact on the social or environmental issues the company’s CSR program aims to address. The benefit of choice is a key highlight in the free-market economy of the United States. There are many issues in the world that businesses with CSR programs seek to rectify, with the power of choice, the consumer gets to decide what companies with a CSR, and by extension issues that company battles, they wish to support. James Proby, entrepreneur and owner of the social impact business The Men’s Xchange in Colorado Springs, suggests corporate social responsibility “allows the consumer to vote, with their dollars, to impact the lives of individuals throughout their community and solve some social ills while also benefiting personally.” Proby’s statement makes it clear that consumers benefit by getting to choose which social issues they want to support monetarily through being a patron of a business with a social impact. The choices that consumers make regarding what businesses they choose to frequent determines exactly how communities and the world benefit from corporate social responsibility.
The biggest and most important benefit of a corporate social responsibility program is how the community and world benefit. As previously shown, CSR programs tackled issues that plague a community or on a larger scale the world. Here in Colorado Springs, there are many examples of businesses with a CSR program that benefit the community. One of these businesses is The Men’s Xchange, owned by James Proby. This store is a men’s professional clothing store, where every piece of clothing is community donated and a full suit costs no more than fifty dollars. The way the social impact works is for every nine suits sold at the Men’s Xchange; they can dress one person in need in the community at no cost to them. Proby provided a recent example of how his business impacted someone in the Colorado Springs community:
We helped dress an individual three weeks ago at no cost, he was going to a job interview. He got the job and it is in a professional environment, he has received his first paycheck and knows he needs to dress more appropriately for that environment so he’s returned and shopped with us to help fill his professional clothing needs! This means the impact and the exponential portions of it means that he is no longer on unemployment, he is not drawing away from social assistance, and in fact he’s earning his own money and paying into socially beneficial programs, it means he has the ability to increase the purchase power inside of our local economy, housing market, retail market, the list goes on and on.
Another example of a local business providing benefits to the community and the world is a company called Who Gives a Scrap. According to Dr. Dennis Natali, Pikes Peak Community College business professor and board secretary for the National Institute 4 Social Impact, “this company was designed to keep new and nearly new Art and Crafting supplies out of the landfill. To date (August 2021), they have saved more than 426,375 pounds from the landfill.” The anecdote from Proby and the data from Natali showcase how the Colorado Springs community is benefitting from businesses with a CSR program and how these programs are helping to solve real issues. This isn’t only limited to local companies, look no further than the tech giant Google to see a large corporation actively benefitting the world through its corporate social responsibility initiatives. The Google Sustainability website shows that Google has been carbon neutral since 2007 and has plans to be a carbon-free company by 2030 (Google LLC). With climate change and pollution so heavily tied to how much carbon is emitted into the air, a huge corporation like Google is doing its part to help fight the disastrous effects of climate change. Corporate social responsibility is a business model entirely designed around helping to resolve issues from the local level to a global scale, and the local communities and the world at large reap the benefits.
The implementation of a CSR program into a business is a responsibility. Companies should be held accountable by stakeholders, investors, consumers, and themselves. The days of a business doing nothing but profit-seeking need to end and be replaced with businesses turning a profit and utilizing their influence and resources to help make a difference in their community and the world. The way this change comes to pass is through conscious consumer spending. Consumers should look to purchase goods and services from companies that are part of the solution, not part of the problem. If consumers demand the market incorporate corporate social responsibility, firms will follow that path and create them. All of the previous data and evidence shows that CSR programs benefit the business, consumers, and communities around the world. With CSR and social impact initiatives growing in popularity in the business world, people’s lives can be changed for the better from all corners of the globe.
Cone Communications LLC. “2015 Cone Communications Millennial CSR Study.” CONE, www.conecomm.com/research-blog/2015-cone-communications-millennial-csr-study. Accessed 3 Aug. 2021.
Google LLC. “Mission.” Google Sustainability, sustainability.google/. Accessed 4 Aug. 2021.
Heyward, Chastity. “The Growing Importance of Social Responsibility in Business.” Forbes, 18 Nov. 2020, www.forbes.com/sites/forbesbusinesscouncil/2020/11/18/the-growing-importance-of-social-responsibility-in-business/?sh=17bfbe092283. Accessed 3 Aug 2021.
Lanphear, Kimberly. “Three Reasons Why CSR is Important for Your Business.” U.S. Chamber of Commerce Foundation, 8 Apr. 2019, www.uschamberfoundation.org/blog/post/three-reasons-why-csr-important-your-business. Accessed 30 July 2021.
Natali, Dennis. “Re: Corporate Social Responsibility Questions.” Received by Tyler Garcia, 28 July 2021.
Ohio University. “Why Corporate Social Responsibility Matters in Today’s Society.” Ohio University, 6 Feb. 2020, onlinemasters.ohio.edu/blog/why-corporate-social-responsibility-matters-in-todays-society/. Accessed 31 July 2021.
Proby, James. Personal interview. 28 July 2020.
Stobierski, Tim. “15 Eye-Opening Corporate Social Responsibility Statistics.” Harvard Business School Online, President and Fellows of Harvard College, 15 June 2021, online.hbs.edu/blog/post/corporate-social-responsibility-statistics. Accessed 2 Aug. 2021.