Corporate social responsibility. We hear the term all the time, but what does it really mean, and why is it so important in today’s business landscape?
CSR is the concept that companies can—and should—use their capital, resources and influence to support, benefit and work with the communities in which they operate, to add value that reflects the community itself. It’s rooted in the idea that businesses are about more than making money and answering to shareholders; they have an equal responsibility to the societies of which they are a part.
Subscribing to this concept and actually having strong corporate social responsibility strategies is more important than ever in a world embattled by poverty, political conflicts, economic crises, climate change and intensifying natural and human-made disasters. In fact, our own civic engagement research shows that more than 80% of respondents around the world expect companies to address the social ills in their countries. CSR can act as a ray of hope amidst societal challenges; businesses have the resources and commitment to take on the most important issues of our day and work to create a better world for us and future generations.
Here, we dive into three critical trends affecting business and show you how to effectively incorporate them into your company’s CSR strategy.
Business Trend 1: Stakeholder Pressure for Strong ESG Practices
Stakeholders don’t want to hear vague statements about companies “doing good.” They want to know the specifics of what companies are doing to address the climate crisis and major social issues of our day, how they are making and carrying out these decisions and the real impact they are creating. This is ESG: environment, social impact and (corporate) governance.
ESG is rapidly becoming a focal point of CSR, even a practical stand-in for the broad term. The stakeholders homing in on ESG include:
- Investors, who are increasingly seeking out and prioritizing companies that are committed to creating a net positive by doing good and/or minimizing harmful business practices.
- Customers, who more and more commonly choose to buy from companies they see as having a positive impact.
- Employees, who are progressively opting to work for companies with stronger CSR policies, sometimes even taking a pay cut to do so.
According to the 2023 Edelman Trust Barometer Global Report, 69% of employees agreed that having societal impact is a strong expectation or deal breaker when considering a job. These expectations are even more pronounced among younger generations. Cognizant’s report The Purpose Gap found that eight in 10 Millennials and 84% of Gen Z respondents say “responsible and ethical business practices are extremely or very important to them when choosing an employer.”
CSR Strategy Solution: Double Down on ESG—Especially Social Impact
“As investors and consumers continue to prefer businesses with the right environmental and social credentials, companies in 2023 will need to make sure their ESG processes are moved to the center of their strategy,” says the Association of Corporate Citizenship Professionals (ACCP). Savvy companies should take note and double down on their ESG practices, particularly the “S,” social impact.
Within social impact and racial equity are essential areas to focus on. “Diversity, Equity and Inclusion (DEI) principles promote the equitable treatment and participation of all people with a focus on the underrepresented and those subjected to discrimination due to their racial and ethnic background, gender identity, disability, etc. Organizations are increasingly expected to apply these principles throughout the development of all their activities,” says Jerome Tennille writing for Optimy.
After the murders of George Floyd and countless other Black Americans in and around 2020, many companies spoke up on the brutal consequences of racism and turned inward to establish or enhance their DEI initiatives. For some, that meant analyzing their internal diversity, leadership opportunities for employees from underrepresented backgrounds, hiring practices and more. For others, it was a time of increased diversity pledges, donations and partnerships with organizations led by and/or dedicated to supporting people who have historically been discriminated against.
Since 2020, however, too many companies have not fulfilled their DEI promises. It may not be the prime news story anymore, but companies still have a responsibility to deliver on their DEI goals and foster more equitable company cultures and communities.
Take this as an opportunity to consider how your company can reinvigorate its DEI efforts through fundraising, grants (unrestricted ones are immensely helpful), volunteering or partnering with organizations that further its racial equity goals.
Business Trend 2: Employees Speaking Out on Work and Purpose
In recent years, changes to the employer-employee dynamic have shifted power to employees in new ways. During the pandemic, overwhelm and burnout fueled the Great Resignation and widespread movement toward freelance work, self-employment and entrepreneurship instead of full-time work for a company. Employees voiced – and continue to voice – their frustration with traditional corporate work culture, though sometimes not with words but actions, like actively disengaging from work or leaving companies altogether.
On the purpose front, some employees have been taking part in a movement to bring their whole self to work. They are increasingly vocal about the causes that are important to them, their need to express these concerns at work and their desire for their companies to show solidarity and take a stand.
CSR Strategy Solution: Employee-Driven CSR Programs and Volunteer Opportunities
Employees are no longer satisfied just knowing about their company’s CSR efforts; they want to be given meaningful opportunities to participate in and shape impact strategies. They value having a voice and seat at the table in deciding what these opportunities are, such as corporate fundraisers, employee donation matching programs and volunteering. Some employees are also passionate about having a say in the company’s CSR strategy itself, from the causes the company dedicates its time and resources toward to which community partners it aligns itself with in order to carry out this work.
Consider taking a bottom-up approach to your company’s CSR strategy that listens to what employees have to say, takes into account their priorities and gives them agency in how they participate. You can learn what issues matter most to employees through (non-mandatory) company-wide meetings, digital polls or surveys, for instance. If your core CSR strategy and issue areas are already set, provide an outlet for employees to do things on their own through volunteer time off and rewards programs like matching gifts and dollars for doers, or create opportunities for employees to voice which specific nonprofit organizations, foundations and community partners they want the company to work with in alignment with those set issue areas and/or their preferred tactics for supporting a cause (e.g. volunteering, mentoring, advocacy, fundraising and donations).
“When you’re looking to level up your social impact program, business integration is key,” advises Points of Light Chief Global Corporate Solutions Officer Katie Stearns. “Invite your HR and DEI colleagues to the table and explore how your goals and roadmaps integrate. Perhaps participation as a volunteer champion becomes part of an employee’s performance evaluation, or your company’s DEI commitments can be reflected in your grantmaking process. Weaving CSR, HR and DEI work together makes it all stronger.”
Employee-led CSR strategies and programs aren’t just about making employees feel good; they have been proven to increase trust in companies, a hard-won and valuable thing in uncertain times like we’ve experienced the past few years. Eighty-five percent of employees and 84% of customers are more likely to trust businesses that involve them in charitable giving decisions, according to Benevity’s The State of Corporate Purpose 2022 report.
Looking for more direction? Check out Points of Light’s 5 Questions to Jumpstart Your Employee Volunteer Strategy and Program Design.
Business Trend 3: Potential Recession-Driven Spending Concerns and Budget Cuts
“2023 will put CSR to the test. During recessions, corporate social impact is even more important, as it has the potential to strengthen your business in the short term and solidify relationships with stakeholders over the long term,” says True Impact. “Customers, investors and employees alike look at corporate purpose when making decisions, and cutting commitments to the community may affect their desire to support your company.”
Whether or not a recession actually occurs, the value-add of a strong CSR strategy remains. It can insulate companies against a number of other precarious situations we’ve already witnessed in this decade like inflation, the Great Resignation, global economy-affecting wars and the pandemic. Doubling down on purpose is a proven way for companies to build resilience against major events like these.
CSR Strategy Solution: Right-Size Your Impact
When it comes to recession-proofing employee engagement programs, social impact professionals can look to right-size their work to ensure initiatives are effective, efficient and aligned with company goals. Use a recession as a time to hone your measurement practices and work collaboratively with HR and other departments to tell the full story of why its not just good for communities but for employees and the company itself.
In addition to contributing to important causes and making the world a better place, studies have found that volunteering has meaningful benefits for corporate volunteers (employees) themselves and the companies that host corporate volunteer programs. For example, employees who are engaged in corporate social responsibility programs show markedly lower turnover rates, dropping by 57% in employee groups most deeply connected to their companies’ giving and volunteering efforts, according to Benevity. Additionally, Purpose Under Pressure found that 91% of employees say their company’s purpose makes them feel like they are in the right place through tumultuous times, like economic instability and the pandemic.
Get more specifics on how to mobilize your team with Points of Light’s 5 Ways to Encourage Employees to Volunteer.
Points of Light condensed years of research and CSR best practices into our easy-to-use Social Impact Playbook to help community engagement practitioners and purpose-driven professionals unlock their company’s full potential for doing good. Regardless of company size or industry, the playbook’s framework and tactics can serve as a roadmap to drive your business’s social impact more strategically and holistically in your community and organization.
Amplify Your Company’s CSR Strategy with Points of Light
At Points of Light, we take to heart our mission to inspire, equip and mobilize people to take action that changes the world. We are a nonpartisan, global nonprofit organization that connects people to their power to make a meaningful difference by providing access to tools, resources and opportunities to help individuals and organizations use their time, talent, voice and resources to meet the critical needs of our communities.
Points of Light offers a wide variety of Corporate Services & Solutions to help level-up your team and increase your impact. Check out our best-in-class tools, frameworks and customized support, including:
- Consulting and Strategic Planning: No matter where you are on your corporate citizenship journey, we can help with designing, expanding and supporting your growth. Utilize our expertise and established processes to evaluate, analyze, recommend, implement and prove the impact of your employee engagement programs.
- DIY Employee Engagement Equipping: We’ll design a customized playbook for your employees or teams to independently plan and manage projects for a specific cause or range of causes that are important to them.
- Direct Employee Engagement: Attain a customized solution to strengthen your corporate employee volunteer and civic engagement program, one that is aligned specifically to your company’s strategic objectives.
- Points of Light Engage®—The World’s Largest Digital Volunteer Network: Points of Light pulls volunteer opportunities from sites across the web to provide the most comprehensive database of volunteer opportunities around the world. Individuals can search for volunteer projects, nonprofits can post and manage event sign-ups and visitors are invited to start projects of their own – all in one place.
Don’t just take our word for it. Katharine Jensen, head of corporate responsibility at Vertex Pharmaceuticals and executive director of The Vertex Foundation, has this to say about working with us: “It is more important than ever to build a sense of community among our employees, engage them in giving back and provide them with a wide range of hands on volunteering opportunities in the communities where we live and work. The partnership with Points of Light has enabled growth of our annual Day of Service volunteer initiative, and our most successful year yet with more than 50% of our employees volunteering globally.”
Ready to take your CSR strategy and volunteer program to the next level? Reach out to us today to get started!