SHOULD BUSINESSES GO BEYOND JUST DOING GOOD TO ACTING RESPONSIBLY? (PART 3) - POCKET FINANCE BUSINESS

Welcome to Part 3 and the final part of this very important topic of discussion for Businesses. I promised to end in Part 3 but since life is always full of surprises and there is no law binding me to 3 why not just make it 4. Just kidding, please read and enjoy.

This Part 4 will focus on the benefits of CSR to Businesses. At the end of the day, most businesses are interested in the benefits of CSR to them, they want to see in what way it affects their bottom-line and brand as a whole. Research carried out within the last decade both locally and internationally have shown a trend of consumers and clients buying/patronizing companies that support and engage in activities to improve society. Advances in social media (giving everyone a voice) mean that negative or destructive practices quickly fuel conversations online. Also, on the flipside, positive practices also create conversations online as well.

A recent longitudinal Harvard University study has found that “stakeholder balanced” companies showed four times the growth rate and eight times employment growth when compared to companies that focused only on shareholders and profit maximization.

Below are a few major benefits of CSR to Businesses. I have given short explanations where necessary:  

1. Win New Businesses: Through the execution of CSR externally, businesses have been exposed to new opportunities through feedback, comments and goodwill from beneficiaries of the initiatives/programmes/activities.
2. Easier Access to Capital: World Organizations and Foreign Investors before disbursing or investing their funds consider certain vital criteria. Amongst such criteria is ethical standards maintained by the company internally and externally.
3. Develop and Enhance Relationship with all Stakeholders: Since CSR will be executing initiatives, programmes or activities for different stakeholders, it will serve as a platform for engaging and maintaining short and long-term relationships.   
4. Cost Savings: CSR encourages cost savings on energy and operating costs due to the fact that it exposes where wastages can be curbed especially as it affects our environment. An example will be a company using only energy saving bulbs and also riding bicycles to work.
5. Brand Differentiation and Reputation: Amongst a certain industry, brands have been known to differentiate themselves as a socially responsible brand and therefore increasing their brand value.  Improvement of Business reputation and generation of positive publicity and media opportunities due to print/electronic media’s interest in ethical business activities. 
6. Customer Engagement and Employee Engagement: Socially responsible companies are known to have a low turnover employment rate because the employees are involved in initiatives/programmes/activities that benefit them and the wider society at large. Also since executed initiatives/programmes/activities also benefit external stakeholders whom customers are a part of, this also serves as an engagement platform outside normal business activities.

A very good case study of CSR being good for business is Unilever. Ever since they implemented their Sustainable Living Plan they have increased growth and profits. By being a responsible, sustainable business they have saved money (energy, packaging, etc.), won over consumers, fostered innovation and have managed to inspire and engage their people.

In Conclusion, I will like to state that CSR is often exchanged for Sustainability based on the fact that this term “Sustainability” is closely associated with maximum efficiency and portrays longevity. It’s a current buzzword in business. 

Written by Oluwadamilola Famakinwa, an entrepreneur with a passion for corporate social responsibility.