Top ways to improve your CSR Performance
Corporate social responsibility has evolved from being an activity of deploying a portion of your profits for philanthropic initiatives to becoming an integral component of how organizations operate. Today, a lot of strategies, analyses, and decision-making go into company CSR activities to create a positive CSR impact. Rightly so, the tangible and intangible benefits of CSR are immense. It can have a positive impact on a company’s bottom line.
Impact of CSR initiatives on a company's bottom line
Positive brand image
88% of customers said they would spend more money on organizations that actively support social causes and engage in activities to improve social welfare. The impact of CSR initiatives on a company’s bottom line is such that it helps you win public trust and create a positive brand image.
Cost savings
Organizations that have successfully implemented sustainable practices into their corporate strategy experience less wasteful use of resources such as water, electricity, paper, etc. which saves money. Another example of how CSR impacts businesses is by reducing employee turnover costs. CSR is a great employee engagement tool that helps attract and retain top talent.
Risk management
Reputation is of utmost importance to any business. As mentioned earlier, CSR has a positive impact on your organization’s image and you enjoy customer loyalty and support for a longer period. Being socially aware and showcasing your sense of ethics for society can insure your brand against risks such as product and service boycotts, negative social media campaigns, intentional defaming, etc.
Increased business outcomes
Prioritizing CSR activities not only helps you create a positive brand image but also increases business profits. CSR impacts employee engagement and thereby, employee productivity. They feel more connected to the organization, its mission, and its vision. This motivates them to strive for excellence and deliver top-notch results.
A lot of companies, while building their CSR strategy, fail to look beyond small gains and achieve a solid increase in their profit margin. Many shy away from talking about CSR and profits – but hey, there is absolutely nothing wrong with CSR that works for both you and society.
Busting the myth: Performance of CSR cannot be measured
Back in 2015, IBM’s Corporate Service Corps program, which enables employees to share their professional skills with companies in developing countries, generated a 300% ROI. Over the years, success stories like this have permeated through a world that perceives CSR as anything but an ROI generator.
Do you have a system in place to measure ROI for your CSR programs?
Many companies don’t. While they realize the inherent benefits of being socially responsible, the task of determining the ROI of CSR activities is unfathomable to them. This is one of the biggest barriers to building a strong case for CSR – as well as getting stakeholder alignment across different levels of leadership.
Although it seems ambiguous, calculating the ROI of CSR activities is quite similar to analyzing and understanding the performance of other core business activities. Back in 2018, Rise Fund (an impact-investing fund for growth-stage companies) and the Bridgespan Group (a global social impact advisory firm) together produced a methodology to predict ROI from CSR activities.
Related: Effective Strategies for Evaluation of CSR Projects
Let’s take a quick look at how you can improve the performance of your CSR programs.
Ways to improve CSR Performance
Through a robust CSR policy, you can drive your capital to programs that are expected to yield social and environmental benefits as well as business profits. There are many ways in which you can amplify the returns that come out of these programs:
Communicate your CSR successes
Leverage the creativity of your marketing team to ideate innovative ways to integrate CSR into your marketing efforts. Promoting the good that you do works wonders in attracting loyal customers and improves your brand reputation drastically.
Your marketing communication should also emphasize highlighting your CSR activities. You can leverage website content resources (blogs, webinars, etc) along with social media presence to spread positive word of mouth. Let the world know about your socially conscious activities and initiatives. This will attract more customers and build stronger relations which will eventually translate into more business outcomes.
Build meaningful relationships with partners
Your CSR activities help you contribute toward social welfare and create a positive impact on society. Invariably, all the parties, stakeholders, and partners associated with your business also contribute to the noble cause. Along with this contribution, they also feel a sense of responsibility and pride towards the organization and actively look to engage and contribute to the business's success.
Collaborate on initiatives that resonate both with you and your partners to foster a sense of camaraderie and improve business relationships. This will improve the impact of CSR initiatives and help the business grow.
Attract investors through robust ESG reporting frameworks
With a huge portion of wealth being transferred to millennials, young investors are entering the investment landscape rapidly. With their laser-sharp focus on ESG (Environmental, social and corporate governance), the new wave of conscious investors expect organizations to build robust ESG reporting frameworks to demonstrate their value to potential investors.
ESG framework makes it easier for investors to understand how you manage risks and opportunities around sustainability issues. Once they see your CSR initiatives' strategy, value, and purpose, it becomes easier to attract more investments. A robust ESG reporting framework will help them govern, analyze, understand, and predict the impact of your CSR activities.
These aforementioned recommendations for CSR improvement will help you enhance your business outcomes and ultimately, the ROI. All the variables that help measure your performance – sales revenue, market share, profitability, competitive advantage, customer satisfaction, and loyalty – are the by-products of your efforts to amplify the impact of your CSR strategies.
The bottom line
Devising a corporate strategy for CSR that drives ROI requires concerted efforts and strategic thinking. But when executed well, the rewards of CSR activities for both company and the community are abundant.
It’s high time you ask yourself - What impact are you driving at your organization with CSR?
Explore CSR Volunteering Activities to enhance your CSR Program - here
