It’s often said that the price of greatness is responsibility, and one could argue that this also applies to companies. The best companies don’t walk away from their social responsibilities: they collaborate with organisations like the International Red Cross or other NGOs, operate in an environmentally friendly way, maintain high ethical standards and invest in local communities. It’s not for nothing that the mission statement of a company like Google consists of 3 simple words: don’t be evil. But is doing good and being responsible really a price you have to pay? Or should we see it more as an investment that will pay for itself many times over? We would say the latter. Why? Here are the 5 of the most important reasons:
1. Corporate Social Responsibility makes your company more valuable
A good reputation is worth a lot of money: the better the reputation, the more a company is worth. But how do you measure a reputation? According to the Reputation Quotient Model (RQ-model), developed by Dr. Charles Fombrun, there are six criteria, such as products & services and financial performance, but also social responsibility, workplace environment and emotional appeal.
A recent study by British Telecom shows that social responsibility plays a much larger role in the Reputation Quotient then one might expect: 25 percent of customer satisfaction is actually determined by a company’s CSR policies. That makes it more important then, for example, the price of a product or service.
2. It fuels innovation
The traditional idea is that social responsibility is a form of charity: companies use a part of their budget to support good causes. But smart companies also use CSR as a way to innovate. A good example is the experiment that Philips Medical Systems carried out with a mobile hospital in India. The project involved a van, which traveled to villages to test people for throat cancer, a common disease because rural inhabitants use a lot of chewing tobacco. The device has been made in such a way that it can be operated by illiterate people. It uses a red, orange or green light to indicate whether someone has cancer or not. Although it was originally designed as part of a social project, the know-how can also be used commercially.
3. Improved employee engagement
Many companies encourage their employees to support charity. So does Michael Page. It’s good for society, but also for the company. According to the earlier mentioned study by British Telecom, 63% of employees feel more proud and engaged if they work for a company that takes CSR seriously. And it has already been shown that there is a causal connection between the wellbeing of employees and the satisfaction of clients.
4. CSR opens future markets
“The only reason we’re doing sustainability is to drive the growth,” said Geoff McDonald, former Global VP Sustainability and Water at Unilever. That’s right: there is no contradiction between making a profit and being socially responsible. A company like Unilever – known for brands such as Dove, Lipton Tea and Magnum ice cream – combines product sales in developing countries with educational programs. Another example is Lifebuoy, a brand of soap that is sold in countries like Bangladesh and Indonesia. Since poor hygiene still is one of the main causes of diseases in many developing countries, Lifebuoy organises courses to teach children to wash their hands.
5. Your company will be more agile
As we mentioned in our Seven Executive Trends for 2016, being socially responsible also helps companies to attract the most talented employees out there. To be able to find the best people, it’s important that a company nurtures an inclusive culture where everybody feels at home, regardless of gender, religion or cultural background. An inclusive company culture is a small investment with huge returns. A diverse workforce makes a company more agile, so it can adapt quicker to changes in the market. Because it´s like with all social policies: the benefits in the end always exceed the costs. You can find our corporate soclal repsonsiblity report here.