The growing trend of companies committing to CSR
A swath of companies, from start-ups to big enterprises, are investing a lot of money in giving back to society or what is more commonly known as corporate social responsibility or CSR.
Start-up businesses like Meditek, a company selling medical equipment to hospitals, have started donating their trade-in products to international aid foundations in countries like Haiti and Uganda, while big corporate enterprises, like Microsoft, have teamed up with non-profit organizations, for example NETHope, to develop the IT sector in Kenya. These companies incorporate CSR projects in their business plans, to give back to the community.
However, they don’t just give away money based on sympathy, but rather look for these corporate social responsibility opportunities, based on a strategic plan.
Giving back is always a kind act – but why?
Well, Witold Henisz, Wharthon Professor of Management believes these companies are investing in sustainability initiatives for quite a few reasons.
The first reason is to win the hearts and minds of those either using their products or being interested in them. This is why many companies give back to stakeholders and the reason we see companies like Coke and Pepsi investing in various health-related research endeavors, for example.
Odebrecht, a Brazilian conglomerate, is another company that’s heavily focused on investing in CSR projects. The company nearly went bankrupt right after its founding, but this strategy saved it, as its strong connection to suppliers and customers offered the financing it so desperately needed. Odebrecht survived because it had a strong relationship with its stakeholders!
This strategy of winning hearts and minds also points out another reason for engaging in CSR projects – generating business opportunities.
But are people big on CSR?
Havas, a French multinational advertising and public relations company, has surveyed customers all around the world and found that 53% of them would pay 10% more on premium products if they knew that the company selling those products has invested and is still investing in CSR endeavors.
In addition, Edelman, an American public relations company, found out that 68% of international consumers are more likely to remain loyal to a company if it constantly seeks to create a positive social impact.
However, that doesn’t mean companies should shun their main goal of seeking profit, but rather look for solutions that result in a win-win situation. Private organizations are now in the spotlight, and the world is waiting to see what novel, positive changes they bring, both from a social point of view and a financial one.
It’s not so much about “just business”, but more about “let’s see how we can make this work out.”