Why giving back is the best way forward for businesses
10th February 2018 by CMIA
It’s not all about the bottom line: companies who give back can have better staff loyalty, engagement and productivity.
Companies are increasingly incorporating corporate social responsibility (CSR) into their business plans, using initiatives such as teaching kids in developing countries to code. In 2011-13 Fortune 500 companies spent $19.9bn (about £13bn) a year on initiatives that had a positive impact on society or the environment.
And while some worry CSR could threaten financial performance, a growing body of evidence suggests it actually provides numerous benefits.
For one, it can help you attract and retain talent. Research by marketing agency Cone Communications found that nearly two-thirds of young people won’t take a job at a company with poor CSR practices. The survey of 1,000 people found 75% of millennials would take a pay cut to work for a responsible company, and 83% would be more loyal to a business that enables them to contribute to solving social and environmental problems.
“To attract and retain talent, you need to show you are doing all you can to give back to the communities you operate in,” says Richard Donovan, head of corporate responsibility for the UK and Ireland at Experian.
The credit agency’s UK employees volunteered nearly 12,500 hours in 2016-17 to support community and financial education programmes, and its social innovation programme has helped more than 9 million people globally since 2014 – by supporting people to pay off unmanageable debts in Brazil, for example.
But CSR is not just recruitment PR; it also has a tangible impact on a company’s bottom line. Companies that integrate climate-change management into strategic planning, for example, see an 18% higher return on equity than those that don’t, according to a study by CDP, a non-profit that helps companies with environmental disclosure.
“While there are many reasons why a company might achieve good results, it’s clear that companies leading the way on sustainability can and do perform well financially,” says Paul Simpson, chief executive of CDP.
Enterprise software company SAP’s 1,800 UK employees can take part in Africa Code Weeks in 35 countries, helping young people develop technical skills and promote economic development. “I do not believe CSR undermines our financial results,” says Tom Loeffert, HR director for the UK. “By providing the opportunity for employees to do meaningful work, we have seen higher levels of engagement and productivity. CSR can also help us win new deals and, ultimately, grow our business.”
For the greater good: six CSR drives
Google’s Project Loon
Forming a network of floating satellites near space, Loon will provide internet access to some of the 4.1 billion people across the globe who do not have it.
Toms shoes
For every pair of shoes sold by the company, a pair is donated to someone who needs them. Toms has shipped 75m pairs, which has contributed to protecting more than 2 million children from hookworm, an intestinal parasite typically acquired by walking barefoot on contaminated soil.
Asda’s wonky veg box
To tackle food waste, the UK supermarket group last year began selling imperfect vegetables via a “wonky veg box” priced at £3.50, 30% cheaper than standard lines. Farmers may benefit by getting money for produce such as misshapen carrots, which are often chucked away.
Nu Skin’s Nourish the Children
Employees and customers can purchase and donate a nutrient-rich food to people suffering from malnutrition and famine. Since 2002, the company has donated more than 550m meals to malnourished children across the globe.
Ikea’s brighter lives for refugees campaign
Last year, Ikea funded a solar farm to bring renewable energy to the 20,000 Syrian refugees living in the Azraq camp in Jordan. Each family can now power a fridge, TV, fan and lights, as well as charge their mobile phones – essential for contacting family overseas. The solar farm will save $1.5m (£1.1m) and reduce CO2 emissions by more than 2,000 tonnes per year.
Heineken’s responsible consumption
Heineken wants to brew a better world. The beer maker invests 10% of its media budget in some countries on advertising to encourage responsible alcohol consumption. It also committed to invest €200m over five years on a campaign to combat drink-driving.