It’s well known that companies benefit from the halo effect that corporate social responsibility (CSR) provides, but did you know that social and environmental impact work and ethics policies can significantly reduce operating costs too?
Companies “do well by doing good” when they design and execute successful CSR programs that generate income through building brand awareness and loyalty, mitigate risk in the forms of expensive crises and fines, minimize the high costs of employee turnover and more.
Keep reading to learn how your company can use CSR programs to reduce business costs, and boost impact.
How to Use CSR Programs to Reduce Business Costs
Foster brand loyalty
From shareholders and investors to consumers and community members, stakeholders are increasingly prioritizing companies with proven social impact programs and ethical practices. Strong CSR strategies can have an outsized impact on companies’ reputations compared to how much they cost to implement.
CSR is great for brand building and marketing, but be mindful of not prematurely promoting CSR initiatives, overexaggerating your impact or engaging in misleading “greenwashing” practices. Any of these have the potential to backfire and erode hard-earned stakeholder loyalty.
Enhance risk management
Having a strong reputation across a variety of stakeholders can help insulate a company from the consequences of difficult situations like short-term underperformance, global economic uncertainty and pandemics. Those who feel a connection to a brand because of the good it does are more likely to forgive minor shortfalls and missteps.
Moreover, implementing solid CSR practices (social impact, sustainability, corporate governance, etc.) can position companies to prevent internal social and environmental crises, better respond to external ones, and comply with existing and future laws and regulations.
Reduce turnover and increase productivity
Effective CSR programs can significantly increase employee engagement, productivity and retention rates. According to Benevity, turnover dropped by 57% in employee groups most deeply connected to their companies’ giving and volunteering efforts.
Satisfied, proud employees also provide a reputation boost for companies and incentivize valuable professionals to want to work for said companies. Case in point: the 2023 Edelman Trust Barometer reported that for 69% of employees, having societal impact is a strong expectation or dealbreaker when considering a job. “By a six-to-one margin, on average, respondents want more societal involvement by business on issues such as climate change, economic inequality and workforce reskilling,” said CEO Richard Edelman in a press release on the Trust Barometer.
Making sure employees are taken care of can itself be part of your company’s CSR strategy, one that pays dividends in employee engagement and retention. “Implementing new workplace policies shows social responsibility towards your employees by focusing on their needs and rights and making them feel valued and cared for,” Vantage Circle posits. “These policies range from emergency employee funds that any employee can dip into when in trouble, mental health [time off] or providing daycare services for working [parents].”
Go green, save on overhead costs
Sustainability is a component of CSR that can directly reduce costs in the long-run, and notably so. Think: saving on overhead by installing more environmentally friendly smart thermostats and LED lights or investing in renewable resources amidst the rising or unpredictable costs of harmful fossil fuels.
“Environmental performance influences your bottom-line. Improving environmental practices such as reducing pollution and improving waste management can lead to better financial performance through both increased revenues (e.g., enhanced brand equity) and lower costs (e.g., operational efficiencies),” says the Network for Business Sustainability.
Check out these 5 ways to encourage employees to volunteer.
How to Boost CSR Program Impact
Give nonprofit and community partners what they really need
Don’t make assumptions; ask your social impact partners how your company can best contribute: monetary and/or in-kind donations, grants, sponsorship, networking, volunteering, pro bono consulting or something else.
For grantmaking, we strongly encourage you to consider providing unrestricted grants. This allows your impact partner to direct funds to where they can have the greatest impact, whether that be programming, evaluation, research or essential capacity-building functions like marketing, HR, technology or finance.
Providing unrestricted grants also accelerates your collective impact by getting funds to where they need to be more quickly, without time and energy-consuming proposals, reports, reviews and approval processes. And it’s a meaningful show of faith in your social impact partner that recognizes their expertise, indicates respect and demonstrates true partnership.
Partner with small, local and grassroots community organizations
They know the needs of their communities and causes best. They are nimble, sometimes less encumbered by the bureaucracy that can afflict larger organizations and they oftentimes have innovative, highly effective tactics for delivering on their missions.
Measure, manage and multiply your impact
What gets measured gets managed. Track, analyze and evaluate your CSR programs in order to improve them and increase your impact in the long term. Set specific goals, benchmarks and milestones – and don’t forget to celebrate when you achieve them.
“Good disclosure practices can lead to greater visibility with stakeholders and financial partners,” says the Network for Business Sustainability. “The process of documenting and communicating CSR practices provides benefits to corporations, including the ability to formalize their position on CSR, identify organizational strengths and weaknesses, and manage stakeholder relationships and expectations.”
A True Impact article indicates several ways that CSR impact measurement can further social and business value. “Impact measurement provides evidence-based metrics to optimize CSR programs. Social return on investment (SROI) and other impact data can help companies improve their methods and allocate resources wisely, especially in times of economic uncertainty.”
Furthermore, “Impact measurement helps companies validate the results of their corporate citizenship efforts for ESG reporting. Employing a proper CSR impact measurement strategy ensures their ‘S’ metrics follow a methodology that ESG auditing and assurance providers can trust.”
Most importantly, “By regularly assessing and evaluating the impact of their CSR programs, businesses can explore new ways to achieve their goals using actionable insights from evidence-based data.”
Putting CSR Impact and Savings Into Action
Ready to start reducing costs and increasing your company’s impact through world-class CSR programs? Points of Light’s Corporate Services & Solutions include everything from self-managed DIY resources to customized CSR strategy support and program management.
- 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.