Corporate Social Responsibility is Good for Business
The primary purpose of a company is to maximize shareholder value by making a profit and a high share price. This Blog will discuss examples of Corporate Social Responsibility and how Corporate Responsibility adds to the bottom line and is Good for Business!
An early example of corporate social responsibility is The Cadbury Chocolate Company. They created the Bournville Village for the benefit of its employees. The Bournville Village is a beautiful and safe place to live for the Cadbury workers in the 1870’s. The 1870’s was a time when most workers lived in dirty dangerous slum areas. The Cadbury family also introduced social responsibility practices including medical coverage, early pension funds, and education and training for employees. In the 1900s they boasted that they had built “a successful business in a successful community”. https://www.cadbury.co.uk/the-story watch a short video about Cadbury here: https://www.youtube.com/watch?v=EbX_WvpgL0o
Contemporary Companies also have a culture of corporate responsibility. Ben and Jerry’s Ice Cream donates a portion of revenues to Community Development. For details visit their webpage at: http://bjsocialresponsibility.weebly.com/csr-for-society.html per Ben and Jerry’s webpage:
Companies, businesses and corporations concerned with social responsibility align with appropriate institutions to create a better environment in which to live and work. Ben and Jerry’s set up a foundation to assist in learning and public education to educate people who live in underdeveloped countries. For example, Ben and Jerry’s contributes $ 0.05 from each 1 liter ice cream container.
Molson Coors created it’s “taxiguy program” to get those who may have had a little too much to drink home safely. For details visit: http://www.taxiguy.com/Creator%20of%20Taxiguy.html
These are three great examples of Corporate Social Responsibility. Here are more examples of corporate responsibility and reasons why Corporate Social Responsibility is good for Business.
Ways Corporate Social Responsibility is good for Business:
It Saves Money – General Mills is saving millions of dollars while helping the planet through its efforts to reduce its carbon footprint by reducing energy usage. http://midwestenergynews.com/2015/10/15/feds-give-general-mills-kudos-for-efficiency-at-iowa-plant/ says:
General Mills, which is headquartered in Minneapolis, has reduced energy intensity among 25 of its U.S. manufacturing plants by 6 percent. It has committed to hiking that figure to 20 percent among that group of plants within the next decade.
The improvements made thus far are expected to cut the plant’s energy use by one third, saving the company about $4.3 million a year.
Changes include high-efficiency lights, boiler improvements and, perhaps most impressively, a comprehensive heat-recovery system that collects heat where it’s not needed and moves it to where it is needed.
Brand Differentiation – Companies are always looking for ways to differentiate themselves from the competition. For example, in the extremely competitive Cola Wars, both Pepsi and Coke promote strategies of zero water consumption and bottles made from recycled materials. For Coke’s Corporate Responsibility pages see https://www.cokecce.com/sustainability/overview. For Pepsi’s Corporate Responsibility pages see; http://www.pepsico.com/docs/album/sustainability-reporting/pep_csr14_sus_overview.pdf
Customer Engagement – A positive message to customers about ways your company is helping the social and physical environment is a great public relations and excellent brand enhancement.
Employee Engagement –providing ways for your employees to help the company be socially responsible can build employee engagement by providing Leadership Development opportunities. Leadership skill is a major factor in corporate success. Working together on projects outside of the office help build what the Marines call esprit de corps.
Employee Recruitment and Retention – In the global war for talent, most top performers view their position as a calling – not just a job or career. Many top performers insist their work have meaning. Many top performers want to work for a company that cares.
Starbucks is one of the best examples of a company that practices corporate responsibility. Starbucks donates to food banks, sources its beans from suppliers who produce Ethically and sustainably, and provides education reimbursement and insurance to both full and part-time employees.
“Companies should not have a singular view of profitability. There needs to be a balance between commerce and social responsibility… The companies that are authentic about it will wind up as the companies that make more money.” Howard Schultz of Starbucks.
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About the author: Ken Smith is an Enrolled Agent and Senior Staff Accountant with Brown CPA Group, Ltd. We know that success means different things to different people. While a business owner strives to maximize profits, increase efficiency and plan for succession; an individual client is more concerned with tax planning, wealth management, retirement and estate planning. At Brown CPA, we work with you on the total picture. Together, we succeed.
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