Whether you own a small business or you are the CEO of a large corporation, it's important to focus on more than just your profits. Consumers are more likely to work with businesses that show they are socially and environmentally responsible. Understanding what that means and how to implement it is essential for ensuring your company thrives responsibly.

What Is Social Responsibility for Corporations?

Corporate social responsibility is the idea that corporations and other businesses have a responsibility to the world when it comes to social and environmental issues. A socially responsible corporation not only operates ethically but also interacts with stakeholders, customers, and employees in an ethically responsible way. The goal is to create balanced economic, ethical, environmental, and philanthropic practices.

What Is the Triple Bottom Line?

One way that many companies practise social responsibility is by using the triple bottom line method. This method indicates that corporations focus on the three Ps as their bottom line: planet, people, and profit. Companies that have a green mindset tend to have an easier time aligning their organizations with sustainable development and creating a positive impact on the planet. This creates a better and more well-rounded company that doesn't put profit above all else. Typical components of the TBL include human rights, responsible sourcing, eco-efficiency, environmental management, favorable working conditions, diversity and inclusion. Other components may include employee relations, stakeholder engagement, governance, community relationships, and anti-corruption policies.

Why Is Social Responsibility Important For Corporations?

There are a number of reasons it's important to practise corporate social responsibility. More than three-quarters of consumers are more likely to do business with companies that show environmental responsibility. Nearly half of them think that companies that keep mum about social issues don't care how they affect the world. One-quarter of consumers and nearly 25% of investors have a zero-tolerance policy when they decide whether to do business with companies that conduct business with questionable ethics. Consumers are more likely to do business with companies that show strong social ethics and about 66% of them are willing to pay more for sustainable goods.

What Are Good Ways For A Business To Practise Corporate Social Responsibility?

Organizations that wish to demonstrate corporate social responsibility should do so with strategies that focus on good labor practices, anti-corruption policies, environmental policies, and the principles of human rights. The United Nations Global Compact focuses on ten principles. Some of the most important ones include not using child labor, promoting environmental responsibility, eliminating discrimination, and working against all forms of corruption. For example, a corporation that uses a lot of energy should focus on creating that energy from renewable resources. On the other hand, a company that employs mostly white men should focus more on employee inclusivity.

There is a range of other things you can do to practise social responsibility as a corporation as well. Consider focusing on job training for disenfranchised groups, reducing your carbon footprint, and giving back to local nonprofit organizations. Another idea is to volunteer in your local community. By giving back to the community, you not only show your company is socially responsible but also can improve company morale for employees who want to give back to the community.

What Are the Benefits Of Running A Socially Responsible Corporation?

According to information provided by the U.S. Chamber of Commerce, a strong corporate social responsibility program can minimize employee turnover by half, reduce systemic risk by up to 4%, and increase market value by as much as 6%. Strong social responsibility also helps you to build your company's memorable brand, improve your company's reputation, and position the company not only as a leader in the industry but one that creates meaningful relationships with its customers.

How Does A Company Start A CSR Program?

Research is the most important component of creating a CSR program. Understand what your business can do, what your community needs, and how you can align your business values to provide that. It's also helpful to get feedback from your employees to determine where they see a disconnect in the community so that your business may be able to bridge the gap. Implement clear strategies and periodically measure your impact to determine where you can make changes.

Corporate social responsibility and profits go hand in hand. Without a strong and positive presence in your community and around the world, your business won't bring in as many profits. Use this guide to help your business become more responsible and score higher profits.

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