How Important is Corporate Social Responsibility in 2024?

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Consumerism is dynamic and brands need to be aware of the social trends their audience is engaged with. By publishing a corporate social responsibility (CSR), businesses can connect with audience segments that are representative of modern concerns, such as environmental awareness, equality, international politics and more.

This type of brand positioning generates consumer trust. When your business is aligned with a cause, it makes it easy for your customers to identify themselves in your community. It’s a type of customer engagement that can give your brand a unique position, separating you from the competition. However, careful excitation is required, and sensitivity must remain at the forefront of any CSR campaign your brand publishes.

The Beginnings of CSR

Corporate social responsibility is a theory that affirms that corporations are entities with economic, legal, ethical, and philanthropic obligations. The term was coined in 1953, by American economist Howard Bowen, in his work Social Responsibilities of the Businessman. Bowen recognized that businesses possess massive power and influence, and that their actions had a tangible impact on society. CSR includes four categories:

  • environmental impact
  • ethical responsibility
  • philanthropic endeavor
  • financial responsibility

These issues make headlines. People are engaged with issues worldwide because of the prevalence of social media. Online communities are active and able to share their concerns, increasing exposure for their cause. When brands back causes publicly, it can advance a cause to new heights.

What is important for brands, is knowing the social issues that speak to their customers.

According to surveys, a reported 94% of Gen-Z consumers think companies should address pressing social and environmental issues, while 55% of consumers are willing to pay more for products and services that contribute to the changes they want to see. Brands need to see the value of CSR and learn how to engage with social issues in relevant ways that are beyond lip service.

Approaches to CSR

There are a number of routes to CSR.

Philanthropy: Involves donating money or aid to local or international charities. This approach allows for fast action, but offers little to no returns for the business, unless the charity is very active on social media.

Invest: By investing money in community-based developments, the company benefits by helping local communities. The company can improve its public image and develop the surrounding community.

Corporate strategy: Some of the world’s biggest brands choose to incorporate promises into a marketing strategy to reach audiences. For example, Coca-Cola invested in alternative fuels with an aim to reduce its carbon emissions by 25%. This approach is the easiest for the brand to manage, update and provide supporting data for.

How CSR Benefits Brands

Trust: One of the biggest benefits of CSR is consumer trust. According to a survey, 63% of consumers would give businesses that have published a CSR the benefit of the doubt during a crisis. Research shows that companies with a publicized CSR can create a “reservoir of goodwill” that can potentially minimize any negative information about the company on social media, in the news or even negative reviews. This type of trust building acts like an insurance policy for your brand in difficult times and can help dilute negativity or issues concerning your product, practices or brand.

Image Management: The internet provides people fast access to information about your industry, business and brand. Consumers tend to research online before making purchasing decisions, especially for big-ticket items. For this reason, it is important to understand how social media and SEO affects your image. By making public your brand support for a cause that speaks to your audience, it can influence purchasing decisions.

Increase Spending: According to research, 76% of consumers say they wouldn’t do business with a company that holds views or supports issues that are in conflict with their own. Part of developing your customer persona is understanding what causes your audience would support. By linking your brand with causes, and doing major donations, it encourages your customers to spend more.

Retaining Talent: A CSR that represents the core values of your brand will attract people who are committed to the philosophical ideals your brand represents, which can motivate people to stay with your company for the long-term. Such teams are often more reliable and driven than those that do not have any way to identify with your brand.

Why is CSR essential in 2024?

Consumers are empowered with knowledge and choice. They are able to make choices based on more information, greater range and price points. The majority of consumers seek information about the product they want to purchase online and here, they will also discover more about your business.

One of the disadvantages of the internet is the polarization of opinions. People are divided on issues and clearly state their opinions on social media. Brands can leverage the positives of aligning themselves with a cause that holds interest for a majority of people and causes little division, such as causes for cancer research or environmental activism. Selecting broad topics like these allow your brand to benefit from the optics while remaining distant from politically charged issues.

However, you can also choose to support a cause that is divisive, if you understand your core consumers and are willing to stand by your CSR. During Pride month of 2023, many fast-fashion brands chose to release rainbow colored items in a show of support for LGBTQIA+ rights. While many consumers understand the damage that fast fashion does to the environment, and the documented human rights abuses of factory workers, people still gravitated towards supporting the brands because they choose LGBTQIA+ rights as an important cause that should be celebrated. So despite many of these consumers understanding environmental impacts or workers’ abuses, they still choose to support a brand because it provides a way to represent a cause they care about in a visually engaging way that declares the intention of the consumer to an audience. Often this type of virtue signaling is used online. Audiences are often concerned with image rather than actual action, so your CSR needs to not only answer a social concern, it can also do it in a way that your consumer can leverage on social media.

Your CSR is essential to your online presence. It should be representative of your actual values, but also provide your consumers with a sense of satisfaction when purchasing from your company. The type of cause you select should also consider your industry – such as a mining company supporting reforestation – as this will build your social credit for a time that will challenge your brand.

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