Starting up a new CSR program can be a challenge, because there always seem to be more questions than answers. But here’s a process that should get you on the right track.
There are an infinite number ways for businesses to create social impact through their CSR programs. Firms can tackle social issues, environmental issues, or engage in corporate philanthropy. Need specific examples? Check out CSRWire for an ever growing list, or download our free whitepaper for ideas. So how do you start up a new CSR program, and make sure it’s effective?
The typical process usually starts with a list of program ideas: We should donate to charity. We should do some volunteering. We should add something progressive to our benefits package. Unfortunately, only after a particular idea is selected does anyone try to determine if there’s some sort of business benefit.
Instead, look at it the other way around.
STEP 1: IDENTIFY THE BUSINESS BENEFIT YOU WANT.
The most common business benefits of CSR are legitimacy, visibility, differentiation, client relationships, and employee relationships.* Let’s look at each of them in turn.
Social and ethical norms shift, sometimes changing what can be considered an acceptable business practice. For example, even though Nike wasn’t breaking any laws, activists put the company under intense pressure to address poor working conditions in the factories that make their products. While Nike eventually handled the problem, ignoring it could have threatened Nike’s entire business.
Not all businesses have such obvious legitimacy challenges, but there are likely to be negative environmental or social impacts somewhere, even if they’re as basic as electricity and water use.
It’s probably not possible for a firm to have too much visibility. If marketed properly, CSR practices can result in good attention for your company. More frequent positive media (and social media) can support brand awareness.
On occasion, I meet someone who is mystified by the success of Toms Shoes. If you’re not familiar with Toms, they're a shoe company that donates one pair of shoes for each pair purchased. The shoes themselves are floppy little canvas things, but they sell for $55. And they’re incredibly successful. Obviously, they’re doing a lot of things right, but their One for One® program really made them stand out in the already saturated shoe market.
This benefit is the one most likely to be used to justify a charity event table sponsorship. But there are more cost effective ways to improve client relationships with your CSR programs. If the client is involved with a charity, it can’t hurt to dig deeper to find out why. Perhaps it’s because their employer requires them to sit on a board, and that particular organization has the fewest meetings!
But charity isn’t the only way to make your customers happy, is it? Investments in product safety can absolutely be considered CSR in these cases. For example, Muse Air banned smoking on all of its flights back in 1982 for the health of its customers and crew — six years before any competitors (who all banned smoking because of federal law).
This is perhaps the benefit with the widest range of CSR program options. From volunteering to “jeans day” to socially progressive employee benefits, there are hundreds of ways to make your employees happier with CSR.
Identifying the benefits of CSR first helps you weed out low-ROI programs. If the overall business benefit isn’t that important to you, you might be wasting your time implementing programs around it. But if you’re clear on what you want out of the process, it’s much easier to track whether or not your CSR program is working.
STEP 2: SELECT A CSR ACTIVITY THAT DIRECTLY SUPPORTS THAT BUSINESS BENEFIT.
Can you clearly identify the cause and effect between your CSR activity and the potential business benefit? If not, toss that idea out and start again.
There are an infinite number of programs that can have a positive environmental, social or governance benefit, but only a handful will make sense for your business at any given time. Never engage in CSR activities that you can’t directly connect to a business benefit. Until about 2003, researchers were unclear about the link between corporate social performance and corporate financial performance. In other words, sometimes it looked like CSR was a benefit to the company, and other times CSR appeared to be a cost. The reason? Non-strategic CSR programs generated inconsistent results. This means that you shouldn’t pursue ad-hoc programs. It’s actually better to have no CSR program at all than to engage in one with no overall strategy (like buying tables at charity events.)
STEP 3: INVEST IN CSR THAT YOUR STAKEHOLDERS ARE INTERESTED IN.
Especially in privately held or owner-managed businesses, CSR can be limited to the activities that personally interest the owners. While this makes sense (the owners are important stakeholders!), it doesn't scale well.
For strategic CSR to have the biggest effect, it should be meaningful to the stakeholders directly connected to your identified business benefit. For example, if you want to use CSR for brand building, select CSR activities important to your target market. If you want to use CSR to improve employee relationships, choose issues of interest to your employees. The best way to determine what's important is to ask. Not only will this help you pick the right activity, but the process of soliciting feedback on potential CSR activities will likely increase stakeholder engagement.
*This is true for privately held and owner-managed firms. For publicly traded companies, the list would also include other stakeholders, like investors, the media, and regulators.
Thanks for reading this far! We hope this was useful to you. If there are any other topics you would like us to cover, or you're interested in exploring getting professional help setting up your CSR program, please contact us.
Valor CSR specializes in creating affordable, effective programs that help you satisfy customers, inspire employees, and increase profits all while making the world a better place. We look forward to hearing from you!
What are the business benefits of CSR?
What is effective CSR? (coming soon!)
What is ineffective CSR?
Why start a CSR program? (coming soon!)
What are the strategic drivers of effective CSR? (coming soon!)
What are the components of a CSR program? (coming soon!)
How do you determine what CSR resonates with your stakeholders? (coming soon!)