There is much debate regarding the relationship of fiscal responsibility to social responsibility in the corporate world. Corporate strategists ponder how to balance the goal of serving the needs of their shareholders with the goal of bettering the world. The question is, however, is there necessarily a dichotomy between the two objectives?
That is, indeed, debatable. Guler Sabanci, chairperson of Sabanci Holdings and currently listed as number 70 among the top most powerful women in the world according to Forbes, is quoted as saying: “I wear two hats. The one is business and increasing my shareholders’ value; the other is social responsibility.”
Can the two objectives be married as part of your business model? Advertising maven Cindy Gallop observes: “Despite their good intentions, today’s businesses are missing an opportunity to integrate social responsibility and day-to-day business objectives – to do good and make money simultaneously.”
Examining the Definition of Social Responsibility
Investopedia notes that social responsibility “entails developing businesses with a positive relationship to the society in which they operate.” In other words, social responsibility involves positively impacting society while also improving the financial position of a company.
What relationship exists between achieving corporate financial objectives and acting in a socially responsible manner? The International Organization for Standardization (ISO) notes: “Businesses and organizations do not operate in a vacuum. Their relationship to the society and environment in which they operate is a critical factor in their ability to continue to operate effectively. It is also increasingly being used as a measure of their overall performance.”
The “2015 Cone Communications Millennial CSR Study” well illustrates the connection between profitability and social responsibility. The study reveals that among millennials, the group quickly becoming the demographic marketers must target for sustainable success, corporate social responsibility (CSR) is imperative. A staggering 91 percent of millennials polled indicate that they would switch brands to one associated with a cause, and 66 percent would use social media to engage around CSR.
How to Incorporate Social Responsibility into Your Business Model
Business News Daily’s “What is Corporate Social Responsibility?” highlights three main categories in which organizations can incorporate social responsibility into their business models. They are:
• Addressing environmental issues
• Practicing philanthropy
• Ensuring ethical labor practices
Examining each category, identify areas in which your organization can make a difference for the better. For instance, in the category of addressing environmental issues, what steps is your organization taking to reduce your carbon footprint? Is your company culture geared toward environmentally friendly practices like recycling, water conservation, and utilizing green materials and practices where possible?
In the category of philanthropy, does your organization actively give time and money to local and national charities? Do you foster a commitment to volunteer service among your employees by providing ample opportunities for them to engage in community volunteering? Some organizations have extended a paid volunteer day to employees to encourage philanthropy. Can your organization do that?
As far as ensuring ethical labor practices is concerned, are you demonstrating corporate social responsibility by treating all your employees fairly and ethically, regardless of whether the employee is based in the U.S. or abroad?
The Bottom Line
While the methods by which organizations demonstrate social responsibility may vary from industry to industry, the overarching goal of all CSR initiatives is to positively impact society in general while maintaining a close watch on the financial health of your organization. With forethought and careful planning, the two goals complement each other.
Implementing socially responsible initiatives will bolster your company brand in the minds of socially conscious consumers and employees, as well as make a real difference in the world around you. What could be better than that?