While community participation is frequently regarded as a company’s social responsibility in its entirety, it isn’t. However, a company’s participation in its community is often the most recognizable and outward facing facet of a corporate social responsibility (CSR) program.
As the marketplace has evolved, consumers expect to support businesses that do more than just “business.”
Here are some fast facts highlighting customer’s involvement with company affiliation and CSR. All are excerpted from Cone Communications’ CSR study.
- 83% of consumers will purchase a product based on its CSR affiliation.
- 87% of millennials prefer to purchase from companies dedicated to CSR.
- 85% of consumers will switch brands to be associated with a CSR-focused brand.
- 91% of millennials will this same switch.
- 73% of consumers care about the company, not just the product.
CSR is becoming the rule, not the exception
At its essence, a company’s participation in CSR is how a company helps to define and promote its community. There are several different components to this, which include: job creation, diversity and inclusion in the workplace, civic engagement and giving, and local involvement.
More often than not, companies are engaged in one or more of these initiatives, yet don’t identify them as being part of a CSR program. One of the first tenets of a good CSR program is for a company to “know thyself.”
It’s important for a company to be candid about who they are, what they do and what they’d like to be.
I’m often shocked at how infrequently companies develop strategy around their community participation, allowing it to develop by default and without a tie to business goals.
In working with clients to develop and/or formalize a CSR program, one of the exercises we do is audit current practices. Below is a list of questions we use to identify key issues that need to be discussed to determine how these components will impact a company’s CSR program.
- How many full time and part time workers do you have? What is the trend? Hiring more or less?
- What is the attrition rate for workforce?
- How many workers reside in low-income areas or come from hard to employ populations?
- Where is your company located? Are you located in a low-income area or make impacts and improvements in low income areas?
Diversity and Inclusion:
- Who owns your company?
- Who sits on your Board of Directors?
- Are your company demographics ethnically comparable to that of the community in which you are located?
- Are your wages comparable for men and women?
- What training do you offer to promote diversity and inclusion in the workplace?
Civic Engagement and Giving:
- What synergies exist to benefit your business and the community?
- Do you compensate employees for volunteering? Do you record where they volunteer?
- What could you “donate” to support community?
- What policies and procedures exist to support civic engagement and giving?
- What percentage of total expenses are spent with local suppliers?
- Do you have policies indicating a preference for local providers, where possible?
- Is majority of ownership located near workforce?
- Do you have a process to identify and screen significant suppliers?
- Are your suppliers audited/verified by 3rd party source?
As customers continue to shift their purchasing decisions by aligning with companies who have a strong community orientation in their CSR programming, there are opportunities for companies to rise to meet these expectations or fail in doing so.
Is your company up for these challenges and changes?