What is Corporate Social Responsibility (CSR)?

Anisha Nandi
Co-Founder, CEO

Intro

CSR stands for Corporate Social Responsibility, or a company’s impact on its employees, customers, communities and the public at large. This impact centers on a few main pillars including Community Engagement, Diversity Equity & Inclusion, Environment, and Corporate Governance. Here, we’ll give you an idea of how to think about the role CSR plays in the future of company culture and strategy. 

Big Takeaways:

  • Corporate Social Responsibility increases employee engagement, benefits a company’s bottom line and enhances public image
  • CSR is quickly becoming a critical pillar of company culture & strategy as the future of work evolves 
  • Authentic Community Engagement is the cornerstone of a good CSR program

What is CSR, and why should companies care?

Countless studies have shown CSR can boost employee engagement, improve a company’s bottom line and boost their public image.

Corporate social responsibility is not a new concept - it’s been around for decades, really taking hold in the 1950’s. But today, it’s more important than ever. 

The Future of Work: The Great Resignation, War On Talent & Changing Workforce

We’re seeing massive change in the workforce: over 4 million people quit their jobs in April 2021, remote and hybrid work became a new norm during the COVID-19 pandemic, and company purpose took center stage amid massive social movements.

As today’s workforce re-evaluates their priorities, searches for purpose and charts their career paths, we hear the same thing across company leaders:

“How do we engage current employees, retain them, and recruit new ones in today’s world?”

Gone are the days of ping-pong tables and snack walls as a differentiator, now companies are scrambling to understand what makes employees stick around in the wild-wild west of modern workplace culture and strategy.

Cue: Corporate Social Responsibility. 

A New Workforce: Millennials & Gen Z

Millennials and Gen Z are the lionshare of the present and future workforce - and they are choosing where to work based on a company’s purpose and impact. In fact, Gen Z is the first generation to prioritize purpose over salary

And for what it’s worth, it doesn’t just stop at employees, 83% of millennials and 89% of Gen Z would rather buy from socially responsible companies.

2020: An Inflection Point

Like most trends, an inflection point can accelerate the rate of progress dramatically. In this case, 2020 proved to be a critical year for how people viewed their employer’s purpose and role as a corporate citizen. 

People began demanding more of their employers. They wanted to work for socially responsible companies. They wanted companies to declare their impact and take definitive stances. They wanted companies to align with them, both as employees and as consumers more than ever. 

And, they started to call companies out. A new study found that we’re entering an “age of cynicism,” with brand trust at a record low. 

The study warns especially of a phenomenon called “CSR-washing” which basically means when a company makes promises regarding corporate social responsibility for show, but doesn’t actually deliver in a tangible, authentic way. Research bears out that this kind of inauthentic show of goodwill can actually backfire - with employees feeling even less motivated to work for a company that they think is just participating in CSR for optics or financial reasons. 

So what makes a good CSR program?

Socially responsible companies have been around for a long time. Like we mentioned, the concept has been around since the Industrial Revolution and the research is clear, good CSR means higher employee engagement and better economic returns. 

Historically, though, really good corporate social responsibility programs took enormous time and effort, which is why usually only massive companies could pull them off like Microsoft, Google, or PwC. They create entire teams to manage community outreach, plan programs and track  and report results. They release massive reports on themselves, benchmarking their efforts, and reaping the benefits of good CSR. 

Here are the best practices from socially responsible companies.

Community Engagement is the cornerstone of CSR

Every great corporate social responsibility program starts with community engagement. By showing that you, as a company, care about the communities your employees and customers care about - you boost loyalty and positive association.

There are three main components to this: you have to understand what your employees care about, activate community-oriented impact and demonstrate it to internal and external stakeholders.

This isn’t easy - which is why you likely need an entire team dedicated to it. Or a platform like Verbate, which can manage the lionshare of the work for you (cutting down tens of hours of work, and hundreds of emails.

Understand Expectations

  • Employee pulse surveys
  • Competitive Data
  • Employee Resource Group feedback

Activate Impact

  • Community-based initiative funding
  • Skills-based volunteer opportunities

Demonstrate Impact

  • Impact reports for leadership 
  • Real-time engagement tools integrated into workflows (i.e. Slack)
  • Public-facing scorecard

So what are companies doing today?

Remember how we talked about ‘CSR-washing?’  Refresher, new studies found that when companies used corporate social responsibility as an inauthentic signal, it backfired. Instead of boosting employee engagement, inauthentic CSR efforts actually led to employees being less motivated.

That’s why we see a lot of companies struggling through their CSR programs today. Frankly, the current options kind of suck.

Big checks to big charity: 

  • Doesn’t feel connected to communities employees care about
  • Looks more like a tax strategy than a thoughtful CSR program

Employee matching programs

Social Media & PR

  • An instagram post or the letter from a CEO feels reactive and for-show
  • Often seen as virtue-signaling with no action

How to start building your CSR strategy

Feeling pumped up but not sure where to start? 

Consider the following actionable item list:

Determine your internal stakeholder

  • This person is typically an HR or finance leader who can allocate resources and time to championing corporate social responsibility internally

Know your company values 

  • If there are values near and dear to the core of your business, start there when determining how to think about your purpose
  • Find out what causes or impact your employees are passionate about

Show your work 

  • Authentically demonstrate your impact work back to your internal and external stakeholders 
  • Fun fact: Anisha Nandi, Verbate’s co-founder is a former journalist. This business was built because we see a real need in how companies tell their impact stories. We’re here to help.

Once you’ve taken stock of these few things - you can fill out your Verbate Scorecard. This should give you (and the public) an idea of who you are as a company and what your impact on the world is.

Anisha Nandi
Co-Founder, CEO

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