Profit vs. Altruism: What Does CSR Look Like in the Future?
In the late 19th and early 20th centuries, companies conducted business in anything but a responsible manner. Corporate irresponsibility was primarily reflected in environmental pollution, unsafe working conditions, and worker exploitation. However, the industrial revolution marked the first significant step towards corporate social responsibility (CSR) as we recognize it today.
The issue of workers' rights was crucial during this period, not in terms of their job satisfaction, but rather from the perspective of health and safety. Employers at that time realized that a healthy worker is a productive worker, and increased productivity leads to higher profits. Ultimately, that was what mattered most.
Following the Second World War, with the emergence of new challenges and concerns, corporate social responsibility shifted towards achieving social justice and environmental protection. This shift was particularly influenced by the rise of green movements.
Today, corporate social responsibility (CSR) is a universally accepted topic that goes beyond mere discussion of budget allocation. It is an integral part of the global mindset, a trend that should not be questioned but rather embraced and followed.
CSR represents a business model wherein for-profit companies seek to attain social and environmental benefits while also pursuing their financial objectives, such as income growth. It embodies the concept of "doing well by doing good," creating a win-win situation for the planet, people, and profit. Therefore, the question is not whether to invest in CSR, but rather how to invest in CSR effectively to meet the needs of everyone involved.
Designing a Strategy
The approach companies take toward such activities usually depends on economic conditions, as well as the environment and external events. Crises serve as a quick and effective reminder of the importance of unity. As the world changes, so does our perspective and our priorities.
In such situations, there are ample opportunities for socially responsible business practices, but it's crucial to approach strategy design thoughtfully. Our goal in these situations shouldn't solely be profit but also responsibility and assistance. The connection between the brand and the user deepens in such circumstances, provided that communication is sincere and authentic.
Compared to Generation X (27%) or Baby Boomers (16%), a significant 41% of millennials are genuinely interested in companies' CSR practices, underscoring the heightened level of activism and social responsibility among younger generations. Millennials and Generation Z seek transparency regarding brands' CSR strategies, wanting to understand how companies advocate for positive changes and progress in this realm.
Formation of CSR Trends
The shift in attitudes among younger generations and their active involvement in socially responsible topics significantly influences CSR trends. By listening to the needs of both users and employees, brands are becoming more outspoken and assertive in taking positions, leveraging social networks to share their efforts with a wider audience. However, it's crucial for each brand to find its unique voice rather than following trends just because they're popular.
The more responsible a company is, the greater the community's affinity for the brand—respect grows, trust strengthens, and ultimately, loyalty develops. While 55% of Americans consider it important for companies to take clear stances on key social, environmental, and political issues, 77% of consumers are highly motivated to purchase products from brands committed to making the world a better place.
When planning CSR activities, it's essential to focus not only on end-users but also on employees. Seventy percent of employees would not work for a company without a higher purpose, and an impressive 92% of those employed in socially responsible companies would recommend them to others seeking employment. In such work environments, employees feel more motivated and inspired, resulting in significantly lower turnover rates. The upcoming generations will likely seek employment in accountable, transparent systems that align with their values—something to ponder.
In what ways can companies act socially responsible?
When it comes to sustainability, companies can utilize plastic waste to create new products, establish green offices, utilize renewable energy sources, install solar panels, and combat food waste. Ethical business practices include advocating for pay and treatment equality for women and men at work, fostering inclusion, and engaging in philanthropic actions such as donations, volunteering, supporting local communities, and establishing non-profit organizations. With such a broad range of important topics, each company can find its voice and contribute in a meaningful way.
There are numerous positive examples of socially responsible businesses. For instance, since 2018, Lego has been working towards making all their products fully sustainable by 2030.
Another noteworthy example is the Japanese company Epson, which recently unveiled its new corporate purpose - "a philosophy of efficient, compact, and precise innovation that enriches lives and contributes to a better world."
"Many of our clients conduct business in a socially responsible manner, and we take pride in that. Epson, for example, exemplifies how everything they do is geared towards creating a better, more humane world," says Milivoj Đorđić, Smartpoint's general manager for the Adria region. He also highlights Epson's century-long commitment to environmental protection, emphasizing the importance of energy conservation in combating global warming. "Epson's innovative printers with heat-free technology significantly reduce energy consumption, require fewer parts, and minimize environmental impact," explains Đorđić.
Which companies are known for corporate social responsibility?
The software company Salesforce follows a 1-1-1 model, dedicating 1% of its products, 1% of its capital, and 1% of its employees' time to support local communities and non-profit organizations, providing substantial annual support.
Levi's brand adheres to established standards for workers' rights and safety in the workplace while also prioritizing eco-friendly production practices. Starbucks collaborates with local coffee producers to ensure ethical sourcing practices.
Google is recognized for its corporate social responsibility efforts, including initiatives addressing social issues and environmental concerns; their data centers operate with 50% less energy consumption compared to others worldwide.
Platforms like Netflix and Spotify offer various benefits to employees and their families, including paid leave for both parents, even in the case of adoption, and actively support causes like Pride, environmental movements, and more through their social networks.
Disney focuses on reducing waste and carbon footprint, zero emissions, water conservation, and advocates for employee safety and rights.
An intriguing example of socially responsible business is The Washington Post, which combat fake news during the global pandemic through a viral TikTok profile, contributing to information dissemination and public awareness.
While the fine line between profit-making, image-building, and genuine altruism remains uncertain, there's room for optimism. Ultimately, raising awareness and promoting education about existing problems is a crucial first step toward finding solutions.
What is not CSR?
Simply donating to exhaust a budget isn't CSR; it's merely humanitarianism, often short-lived. CSR isn't just about fulfilling a duty; it should evolve into a long-term practice for companies. While it may seem futile to be the sole entity tackling and resolving root causes, remember that someone must pioneer change and set an example for others to follow. Ideally, responsibility should be ingrained in our actions, not something we fetch from a drawer only when needed. And if we forget this principle, rest assured, another crisis will emerge to remind us of our interconnectedness.
There's no room for neutrality anymore; courage is needed now. It's time to discover purpose within a seemingly purposeless system and, above all, to be human—or else, face the consequences of our actions that have brought us to this point.
For BIZLife website text written by: Ivana Tomić, Smartpoint Adria Brand Specialist
Photo: Unsplash