CSR: Beginner’s Guide

 

Corporate Social Responsibility has grown as an industry buzzword. It finds verbal acceptance among a majority of companies, worldwide, though few understand its true meaning or truly follow its requirements. It is a buzzword which provides the believers and non-believers a feel good feeling. Yet for most companies it is nothing more than a Public Relations gimmick to pep up a company’s brand and public image.

A large number of companies in India would speak strongly in favour of a socially and ethically conscious company if people spoke badly about it. Similarly a large majority expect companies to take the lead on social issues they find important. Consumers would identify and support and trust brands which act in the interest of society. CEOs are expected to take the lead in initiating change rather than waiting for the government to impose it.

To many CSR may seem incredibly idealistic, and near impossible to introduce into the business model. Over the past years increasing evidence has been accumulated to establish face CSR policy is beneficial, not just for the community, but also for business. According to the United Nations Industrial Development Organization(UNIDO) “Corporate social responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.”

A  CSR programme is  socially sustainability, environmental sustainability, and economic sustainability, commonly regarded  the “three P’s”: people, planet, and profit.  Companies with a good CSR programme take action that brings positive change on society and the environment, while also growing their own bottom line.

The key elements of effective CSR programs are:

Environmental concerns: Almost all businesses have large carbon footprints, any effort to reduce them are beneficial to the environment. These efforts could include reducing  waste, prioriising recycling, or using locally sourced products. These help save money, and also save the planet. Effective resource management and energy efficiency are two major environmental CSR goals that companies are beginning to implement, especially as the effects of climate change accelerate. Research shows consumers are more likely to support a company that takes steps towards decreasing their environmental impact

Such a partnership would enhance the company’s brand awareness within the community and help the company gain the goodwill of the community.This would come under CSR, because the company is directly involving itself in charitable activities related to their own business practices.

Ethical labour practices: Historically the concept of CSR began with the need to provide better working conditions for labour CSR programmes are required to prioritize fair and ethical treatment of employees. This includes ensuring employee safety, promoting a healthy workplace, wages and practices that contribute to employees’ wellbeing.

For multi companies this is especially important since they must comply with different regulations. An example of unethical labor practices would be a company that conducts business in a certain country because doing so enables them to pay their workers less.   This example is all too common.

Economic responsibility:  Not all economic responsibility takes place outside the company walls of your company. A critical aspect of economic responsibility involves paying employees a fair and competitive salary to ensure their wellbeing and their ability to provide for themselves and their families.

Most companies are involved pinching pennies and cutting costs at every corner.  But, paying employees more and purposely avoiding tax loopholes isn’t as insane as it may sound. While CSR can increase costs initially, the long term impact on the bottom line is often still an improvement.

The money spent on employees and in the community around you, often comes back to your business in the form of high-performing employees, lifelong customers, and a decrease in resource and energy costs. Economic responsibility is really not something that companies should be scared off or ignore. A good well organized and delivered Corporate Responsibility programme can help strengthen its bottom line.