Five Current Trends in Corporate Social Responsibility (CSR) (Part 1 of 2)
This is the first of two blog posts to explore five current trends in Corporate Social Responsibility, also known as CSR. In this month’s post, we look at two of these five trends:
- Increased Transparency
- Green Technology
- Acting Locally
- Diversity and Inclusion
- Measuring CSR Impact
Increased Transparency
Companies are responding to increased demands for transparency from both internal and external stakeholders. Employees appreciate greater disclosure of everything from salaries to C-suite policies; employee morale improves when details of CSR programs and policies are known.
Consumers are also not willing to overlook shady business dealings and hidden agendas. Recent corporate scandals and widespread unethical labor practices have soured many customers on some of the biggest corporate names. Companies offering more transparency can capture an increasing amount of the shifting market share. More than 70% of consumers have said that they would pay more for a product if the manufacturer promised (and delivered) total transparency with respect to labor, sourcing, environmental impact, and community relations. If consumers don’t get what they want from a company, they often communicate their unhappiness via the internet. Companies can quickly lose control of their messaging.
Transparency is an investment in goodwill, which can be crucial when a customer has a bad experience with a brand, or when any form of scandal strikes a company. Surveys have found that 85% of customers would give a company a second chance, if that company had a history of transparency. A similar percentage said that they would be inclined to stick through a crisis with a company that practices transparency in its communications.
Sincerity and real commitment are crucial. Beware of “greenwashing” (a superficial commitment to environmental causes, or “virtue signaling” (making false commitments to increase philanthropy, diversity, or community relations). Companies that only pay lip service to these causes can expect consumer backlash when the shallowness of their campaigns inevitably comes to light.
Look for companies to offer customers insight into their values, the programs that they use to advance those values, labor practices, sourcing practices, and environmental policies. The evidence is growing that the more a company shares of itself “behind the scenes,” the more brand loyalty they can inspire.
Green Technology
Socially responsible companies are investing in green technologies, reducing their reliance on nonrenewable resources, and including more sustainable materials and labor sources in their business operations.
Green technology is diverse and offers many options to help businesses become more sustainable. A company can approach the problem through their supply chains, their inventory management, their facilities, and many any other aspects of their business.
In 2022, expect more businesses to seek certifications such as LEED to help make their buildings and processes more environmentally friendly. Businesses may offer employees incentives to use mass transit, to carpool, to bike to work, or to work remotely. They can look for raw material inputs that are made more sustainably and find local suppliers to reduce long-distance shipping and its attendant costs, both from a financial and resource-based perspective.
Next month, I’ll look into the remaining three topics:
- Acting Locally
- Diversity and Inclusion
- Measuring CSR Impact