The Importance of Corporate Social Responsibility

August 17, 2021
The Importance of Corporate Social Responsibility

It has been observed recently that consumers are showing an increasing interest in understanding what companies do to support local communities, knowing whether they follow ethical labor practices, and which causes they support.

Today’s clients, especially younger ones, want the businesses they engage with to be socially responsible. Furthermore, future employees and young entrepreneurs are interested in affiliating themselves with or working for companies that display a strong and genuine concern for their community and the planet.

Corporate social responsibility, or CSR, not only benefits the planet and charities, but also companies themselves. Some of the benefits include:

  • Strengthening their image by receiving positive publicity.
  • Attracting socially and environmentally conscious consumers.
  • Reducing operational and production costs by implementing eco-friendly recycling models and optimizing the use of raw materials.
  • Attracting and retaining the most qualified personnel.
  • Having employees that are motivated and satisfied with being part of the enterprise. The work team’s creativity and cohesiveness might also improve as they feel free to contribute their innovative ideas in the long run.
  • Promoting the creation of strategic alliances to produce new and innovative solutions, services, or products.

There are 4 types of corporate social responsibility in businesses. In the following section, we present them to evaluate which may apply to your business and your organizational culture:

  • Corporate Philanthropy – Consists of improving the community’s wellbeing by means of donating funds. This type of CSR can be executed through matching gift programs in which the business equals the amount donated by its employees to a charity, doubling the total contribution.
  • Corporate Volunteering – Involves motivating employees to carry out volunteer work for a charity. Commonly, enterprises offer a monetary donation to the benefiting charity for each hour of volunteer work their employees accomplish.
  • Environmental Leadership – The business applies operational practices which reduce carbon emissions, promote recycling of materials and products, and reduce the use of raw materials without affecting product quality. In addition, alliances are created with environmental groups to participate in their efforts.
  • Ethical Labor Practices – Some ways to exercise this type of CSR include offering salaries and competitive compensation packages, generous maternity leave and reimbursements toward college tuition.

Beyond the previous examples, there are countless ways in which your business can be socially responsible. Each business can design its own program. For example, there is a shoe company that has a “One for One” initiative through which they provide a pair of shoes to children in need for each pair purchased by a customer online or in their stores. In this way, the company has designed its own corporative social responsibility program; and you can do the same in your own business.

This article is for informational purposes and does not represent an endorsement or a guarantee of accuracy. Popular Inc., as well as its affiliates, subsidiaries or related companies, are not and will not be liable for any special damages, direct or indirect, resulting from the information contained in this article. If you require any type of advice, you should always request it from a competent professional of your choosing.