How to determine if your company is socially responsible

I recently had the opportunity to talk with a class of second year MBA’s, and one of the most outstanding questions students raised was whether they should take jobs with companies that they considered to be socially irresponsible. I wasn’t struck so much by the question as by the intense debate that followed:

Some students of course argued strongly that working for these kinds of companies was a moral “sell out,” and that they shouldn’t lend their support to companies that mistreat the environment or produce destructive products. Conversely, other students took the position that the best way to change an organization is from the inside – and that they would have much more influence and ability to affect social change if they joined the company, despite its flaws.

There is no right answer to this question. But this discussion illustrated that in many cases the definition of a “good” company is intensely personal, and “social responsibility” has many shades of grey. For example, the group was deeply divided about tobacco companies. Clearly, these organizations produce products that are harmful and addictive, and in the past have engaged in deceptive manufacturing and marketing practices that caused enormous damage and loss of life. Today, however, tobacco companies sell legal products in much more regulated ways, and (at least in the U.S.) actively promote anti-smoking campaigns. They also spend millions of dollars on research to reduce the harmful effects of their products and are creating possibly more benign alternatives such as e-cigarettes. In other words, tobacco companies are actually marketing against their own products, and doing so successfully. As the Center for Disease Control in the U.S. reports, from 2000 to 2011 tobacco usage among middle school students dropped from 14.9% to 7.1%; and the downward trend among high school students has been from 34.4% to 23.2%.

Do these shifts suddenly transform tobacco companies to paragons of virtue and make up for years of damage? Of course they don’t. They do however suggest that the distinctions between “good” and “bad” companies are more nuanced than we might think. In fact, most organizations do things that could be considered socially questionable, depending on your perspective. For example, food and beverage companies produce products with additives and sugar that may lead to disease or obesity; clothing manufacturers exploit workers in developing countries and turn a blind eye to workplace safety (as demonstrated in Bangladesh); aerospace, chemical, and electronics companies produce products that are used for warfare; social networking and internet firms utilize tremendous amounts of carbon energy to fuel their server farms; and financial services firms create products that have the potential to cause enormous economic disruption. Even companies that promote sustainability agendas are often doing so to make up for the damage to the environment that their practices are already causing.

Most of us want to work for organizations that we feel good about and can be proud of, which was why MBA students were asking the question in the first place. The reality is that few companies are completely pure, either in what they do or how they do it. As a result, each of us needs to make a personal determination, based on our own conscience and sense of social responsibility, about whether a particular company is for us – and whether our engagement with that company can make a positive difference.

It’s not an easy question, which is why it’s often avoided or ignored. But thinking about it explicitly is well worth doing at any stage of your career.

How to determine if your company is socially responsible

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Corporate social responsibility, also referred to as “CSR,” is the behavior and actions of a company that positively impact its environmental and social surroundings. Today, if your company isn’t practicing corporate social responsibility, it’s well behind those that have already started. Some companies have a department dedicated to fulfilling the CSR needs, planning all initiatives, and following through. There are numerous ways to tackle CSR, and depending on your company’s resources and abilities, it’s beneficial for your company to implement all of these pillars.

Volunteering Time and/or Expertise

Volunteering is a popular choice for companies looking for ways to be socially responsible. Whether it’s volunteering to clean up a park or to work at a soup kitchen, it’s time well spent. Some companies choose volunteer activities that match the company’s message and values, while others simply choose volunteer activities that they’re passionate about. Companies that have departments dedicated to CSR might have established programs for matching employees with volunteer opportunities. Some employees prefer to volunteer their expertise. If you’re in the banking industry, you might want to volunteer to teach students more about finance.

Philanthropy

Philanthropy is a common choice for companies that may be too busy to schedule in frequent volunteering or those who have the ability to donate large amounts. Most companies donate money to organizations of their choice, while other companies choose to donate needed merchandise. Donating specific merchandise can be just as beneficial, especially if it’s going to people who truly need it. When it comes to money donations, there are companies that take part in matching gifts. This means that the company matches an employee’s donation to an organization of their choice. Most programs like this have limits, but you might be surprised at how much companies are willing to spend.

Cause Promotion and Cause-Related Marketing

Cause promotion and cause-related marketing both fall under CSR, but they have slight differences.

Cause promotions are specifically for increasing awareness about a certain cause, without the goal of sales in mind. A company uses its own resources for this. Whether it’s spreading the word through social media, including information about the cause in brochures, or making the cause visible to everyone that comes to your storefront or building, you’re not only educating your customers about an important cause, you’re displaying your values as a company.

Cause-related marketing is done with social responsibility in mind, but it does correlate with sales. An example of this is offering a product in which a percentage of the sale goes to a certain charity. Another example is buying a product to give a product. When a specific product is purchased, a company will give that same product to someone in need.

Workplace Behavior

Your place of work definitely factors into CSR. Most likely, every workplace can be doing something differently to be more socially responsible. Examples include having an employee collection of donations, promoting recycling, turning the office lights off before heading out to lunch or a meeting, using both sides of the printing paper, and more. Small changes can make all the difference. Along with these actions, the treatment of employees falls into workplace behavior as well. Treating employees both well and equally is obviously the socially responsible route.

Company or Industry Related

Being socially responsible also means looking into the impact your company or industry is making and then taking action to fix the negatives. You might need to set aside time to look into different aspects, but it’s worth it to be socially responsible.

One example is reducing packaging. If during your analysis you realize your company is using too much packaging, look for a way to reduce it instead of continuing to waste materials. Another way to go about this is to research the trends of the industry. Look into what other companies of the industry are doing to be socially responsible. Maybe they’re doing something that you could be doing.

These are all beneficial ways to practice CSR. Not only are they environmentally and socially beneficial, they can boost morale and profits. While taking part in CSR, it’s important to keep track of all initiatives and the impact each one has. Figure out what works for your company and what doesn’t. It may take some trial and error, but your company will find its place in the world of CSR if it hasn’t already.

How to determine if your company is socially responsible

When searching for a job, candidates typically spend time researching a company’s website, their products, their employees and the role they are interested in. These are all important factors to consider. But for many of us, we want to know more about a company’s corporate social responsibility (CSR) commitment. Whether you are interviewing for a position on the CSR team or only want to work somewhere that demonstrates a real commitment to CSR, what can you ask or research to really know the truth behind a company’s corporate social responsibility efforts.

Find out how CSR is viewed from the top.

With these questions your goal is to see how corporate social responsibility is viewed by the CEO and the senior leadership team. Is it a priority for them or a check-the-box initiative? Companies that really embrace CSR typically have a senior executive dedicated to, or responsible for, CSR as well as have CSR a priority driven by the CEO. The most successful CSR programs are in some way endorsed by or driven from the top.

Here are a few questions to research or ask:

1. Is there a CSO (Chief Sustainability Officer)? (Note: If it’s an informational interview, this is appropriate, if it’s an official interview for a CSR job- you should research this in advance).

2. How involved is the CEO or senior leadership team with CSR initiatives and decisions? How much does sustainability and CSR weigh into a CEO or executive teams decisions?

3. How big is the CSR team?

4. Who does the CSR team report into?

5. Is CSR integrated into financial measurement, reporting, goal setting or decision making?

Find out what CSR means to the company.

With this line of questioning, your goal is to see how CSR is embedded in the company and whether it is done in a silo or as part of the corporate strategy (or somewhere in between). Even if on the outside it appears there’s limited CSR, sometimes you will learn that the company doesn’t do a good job of communicating their work or perhaps doesn’t even classify it as CSR. And in other cases what you may find is that companies appear to be doing more than they actually are.

Here are a few questions to research or ask:

1. How does the company approach CSR and what type of initiatives are done (is it sustainability? community engagement? cause marketing? philanthropy? nonprofit partnerships?)

2. How has CSR evolved at the company?

3. Is CSR in everyone’s job descriptions?

4. Is there a CSR long term strategy? Is it part of the overall corporate strategy?

5. How do employees get engaged in the CSR work of your company?

Find out how the company treats and engages their employees.

With this topic your goal is to find out how the company ‘walks the talk’ and supports people within the organization. This includes career growth opportunities, volunteer opportunities and general support. Companies that live their values will have those values shining through in the culture, policies and everyday behaviour. Being a leader in CSR isn’t just how a company treats the community or environment but also how it treats their own employees.

Here are a few questions to research or ask:

1. What kind of professional development opportunities are there?

2. Is there a mentorship program?

3. Are there volunteer days or time off given to volunteer?

4. Are there lunch and learns?

If you are like 64% of Millennials and won’t take a job from a company that doesn’t have strong CSR practices, this list of questions will help you consider and evaluate a company’s social and environmental commitments as you decide where to work.

Note: if you are interviewing for a sustainability or CSR position, some of these questions should be researched before the interview.

How to determine if your company is socially responsible

The digital world and technology have brought vast amounts of information. Every person has an enormous library of data at their fingertips. With this opportunity has come a lot of transformation, including an emerging desire from consumers who are now looking for brands to emphasize social responsibility. In fact, they want to do business with companies that are market leaders in social responsibility.

In 2017, Cone Communications published a study (registration required) about corporate social responsibility (CSR). In their reporting, they stated, “Companies must now share not only what they stand for, but what they stand up for.”

The key findings from the study included the following:

• 63% of American consumers were looking to businesses to take the lead on social and environmental change.

• 78% of people wanted companies to address social justice issues.

• 87% of consumers said they would be willing to buy a product or service based on a company’s advocacy concerning a social matter.

• 76% of those surveyed said they would decline to do business with a company if it held views and supported issues that conflicted with their beliefs.

In an article for Business News Daily, Susan Cooney of Symantec stated that CSR is a critical aspect of recruitment. She said, “The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue.” In the same article, Liz Maw, CEO of nonprofit organization Net Impact, noted, “Sustainability . is [now] vital for business success. Communities are grappling with problems that are global in scope and structurally multifaceted. The business case for engaging in corporate social responsibility is clear and unmistakable.”

The bottom line for businesses large and small is that you get a competitive advantage in regards to sales and also talent recruitment by not only claiming that you support positive social outcomes but also by walking the walk and demonstrating it.

Why Becoming A B Corp Can Make Good Business Sense

One of the ways your business can become a socially responsible company is by becoming a “B Corp.” You can gain more significant traction by demonstrating to your customers that you have a credential that sets your business apart from the rest. This certification is done by the recognized global social good nonprofit B Lab.

B Lab achieves its mission to make the world a better place through business and corporate social responsibility by creating a global community. Also, it provides alignment of business missions through its partnership with Benefit Corporation, and it helps B Corps measure their impact.

Around the world, there are currently 2,482 B Corporations in 50 countries and 130 industries. Some of these B Corps include brands such as Ben & Jerry’s, Patagonia, Causebox, Reynolds Jet and City First Bank.

Obtaining the B Corp stamp of approval allows you to join a club of companies that are working together to achieve social good.

• It helps your business differentiate itself from its competitors or, as B Lab states, the “pretenders.”

• You’re joining a global movement for profit and social good.

• It helps companies achieve greater impact, grow to scale and have higher valuations, all of which are elements that investors seek when looking to invest in businesses.

• It helps your business attract talent in today’s market that is more responsive to companies that have a broader mission than just making money.

• You’ll gain access to 80 partners who provide services to B Corps, including in technology and talent, which will help your company save money and obtain third-party services.

• Once you become a B Corp, you have the opportunity to network with other B Corps during the annual B Corp Champions Retreat, which seeks to build a more inclusive and sustainable economy.

Becoming Socially Responsible

Of course, becoming a B Corp is not the only way to demonstrate that your company is socially responsible.

• Create a volunteer program: When you develop a volunteer program, you are accomplishing a number of things. First, you are telegraphing to the public that your organization believes in social responsibility. Second, you are informing prospective employees that you have a value-add for them so they can contribute to society through your company’s volunteer program. Third, you are helping to retain talent within your company.

• Give away a percentage of your profits: Many businesses today, including small companies, give a percentage of their profits, typically 10 percent, to charity. The contribution they make is a way for businesses to demonstrate that they are willing to put their money into an endeavor that will be making a social impact. Additionally, the owners of businesses may be able to take a tax deduction on the gift if they itemize charitable gifts.

Business owners are operating in a globalized world, which means you’re no longer only competing with your competitors in your local community. You’re potentially competing with companies with similar products, services and even talent needs across the nation or even around the world. You’re also competing with major global corporations that may deliver similar products at a much larger scale and a lower price point, and they may have more leverage to attract high-performing talent. An excellent way to set your company apart is to consider becoming a company that is socially responsible and doesn’t just focus on profit as an element of success.

If you’re a small business, you can still create a plan to give back to your community as a socially responsible business.

By: Dan Casarella, Contributor

Today’s consumers don’t just care about a company’s products, services or popularity. They also value businesses that are socially responsible. Consumers will go out of their way to pay more for products and services from companies that align with their sense of values and ethics. Being more socially responsible by making an impact will not only expand your customer base but also give you a sense of accomplishment that will boost your employee morale. Here’s how to start a socially responsible business.

What is corporate social responsibility?

Corporate social responsibility is when a business makes extra effort to improve its local community, the economy, the environment or any other social cause that is meaningful to them. There is no specific definition or set of standards regarding social responsibility, and it’s up to the company to determine their goals and values.

Now more than ever, consumers are seeking out businesses that give back in some capacity. Over 60% of Americans hope that businesses use their platform and resources to drive social and environmental change, regardless of government regulation. They seek out companies that support issues that are meaningful to them and are more likely to buy from socially responsible businesses.

Some startups and small businesses may feel as though they do not have the financial resources to give back. Regardless of your monetary situation, the best currency you can offer is your time. Donating your time and workforce is another important way that businesses can advocate for change.

They [consumers] seek out companies that support issues that are meaningful to them and are more likely to buy from socially responsible businesses.

How to become a socially responsible business in 5 steps

Becoming a socially responsible business isn’t difficult, but it can be challenging to know where to start. There are an infinite number of ways for you to give back and causes to which you can allocate resources. Here is a step-by-step guide to help you narrow down your options and support a cause in a way that is the most efficient for you.

1. Define your company’s values.

Before you can start to give back, take an introspective look at your company and its values. Think about your company’s mission and what it stands for (or against). Once you’ve internally established its values, you can start brainstorming ways to implement them into various social causes and projects.

2. Involve your staff.

Social change should come from everybody within the organization, not just from the top. As you start to brainstorm ways to be more socially responsible, include everyone in your staff within those conversations, especially those of different backgrounds. Having a well-rounded and holistic view gives you a better idea of how to tackle these issues and how your involvement will directly bring change.

3. Recognize issues that matter to you and your audience.

Once you and your staff have discussed ways to make an impact, talk about what issues mean the most to your customers. You can do simple research and analysis by engaging with your customer base and asking them what causes are meaningful to them through social media and email surveys. Discover which types of issues consistently come up with your customers and find organizations you can work with to tackle these issues.

4. Establish realistic goals.

Every company wants to make an impact; however, a common downfall is being too broad or overreaching with your goals. As a group, establish realistic goals for how you can implement change on a realistic timeline. This can be monthly, quarterly or annually and should have specific and attainable steps and goals.

5. Prepare to respond to current events and social issues.

Don’t stay on the sidelines when major events or social movements happen. Be flexible with your social responsibility and know that you can pivot your budget, time and nonprofit partners. You can also change the issues and organizations you work with if you find an urgent issue that you’d like to contribute to.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Measure the effects of your corporate social responsibility

Many companies have difficulties measuring the effect of their corporate social responsibility (CSR) initiatives. Some of the benefits – such as customer loyalty and improved reputation – are hard to quantify, making it difficult to assess the value of your activities.

However, measurement is extremely important as it enables you to:

  • disclose the importance of your activities to your stakeholders and customers
  • improve your decision-making as you move forward with your CSR programmes
  • align your activities with corporate goals, eg decrease turnover or develop staff skills

By measuring the impact of your CSR, you can connect the value of your activities to your company’s bottom line. For example, you can establish a link between skill development and lower training costs, employee satisfaction and lower turnover rate, and even growth in sales leads that increases revenue.

How to measure the impact of your CSR?

Here are some ways to help you measure your CSR success. You can:

  • benchmark your business against others – see measure performance and set targets
  • seek recognition for CSR best practice – eg by taking part in responsible business awards or using measurement tools such as the BITC’s Responsible Business Tracker
  • use key performance indicators (KPIs) to measure your environmental performance – download a guide on environmental KPIs (PDF, 354K)

It’s worth remembering that measurements will probably only show the immediate impact of CSR. The biggest benefit can be the long-term improvement in your reputation.

5 Examples of Corporate Social Responsibility in Companies

Nov 29, 2016 10:05:05 AM / by Involvesoft Marketing

How to determine if your company is socially responsible

Importance of CSR in a Company

Corporate Social Responsibility, or CSR for short, is the idea that a company should be socially involved with the environment around itself. This can range from engaging in nonprofit causes, to bettering the community, or creating stronger connections between employees. Ultimately, a company’s CSR is established to increase overall employee alignment with its values and mission. It is created to make employees, and employers, feel more connected with society. However, not all companies can take the same approach at CSR. It is important for industries to know their niche and what their employees want. Below are 5 different companies that show great examples of CSR in action.

Examples of Corporate Social Responsibility:

1) BMW

BMW holds its pride in being one of the most socially responsible companies in its industry. BMW has set the bar high with a goal of helping over one million people by 2020. They plan to do this by creating programs such as “The Schools Environmental Education Development Project” to help raise awareness of social and environmental issues. BMW’s key to CSR success has always been alignment. They’re a great example of corporate social responsibility because of their balance between a good business model and helping social causes.

2) LEVI STRAUSS & CO.

Levi’s is another company that focuses its efforts on CSR. Levi’s approach is to reduce their environmental footprint by acting in human rights and environmental causes. Just like BMW’s program, Levi’s has a “Worker Well-Being Initiative” that is aimed to help improve the life of their employees. Levi’s has also trademarked their “Water

3) SurveyMonkey

SurveyMonkey, best known for their survey creation software, has created a giving back program to better improve their social responsibilities. They have done this by engaging in an innovative way to give back. Instead of giving out prizes to survey takers, SurveyMonkey donates 50 cents for every survey completed. This donation goes to the survey takers charity of choice. The company has donated over one million dollars to organizations such as Boys & Girls Club of America and the Humane Society. SurveyMonkey’s example of corporate social responsibility stretches far beyond just engagement. They focus on bettering society as a whole, thus giving the company a good reputation.

4) Starbucks Coffee

Since the beginning of its existence in 1971, Starbucks Coffee has always focused on ethical and social responsibilities. Starbucks aims at creating a product that is not only beneficial to its customers, but also to the environment. With the start of the C.A.F.E. program, Starbucks has set guidelines to increase product quality, social and economic responsibility, and environmental management. Partnering with Ethos Water, Starbucks is helping bring clean water to over one billion people who don’t have access to it. What separates Starbucks from its competitors is that they focus on society before themselves. Giving back to the community is a great factor to why the brand is so well known. It goes to show that companies with great giving programs are valued more than ones that don’t.

5) Ben & Jerry’s

Founders of Ben & Jerry’s, Ben Cohen and Jerry Greenfield, have always been focused on giving back in any way possible. At the same time they have kept true to themselves the value of connecting the company with its employees. To accomplish various CSR goals, Ben & Jerry’s created the “Ben & Jerry’s Foundation.” The company has set the bar high by giving 7.5% of its pretax profits to charitable organizations around the world. Ben and Jerry’s strives “to show a deep respect for human beings” whether they work for the company or not. They have donated over two million dollars to multiple organization it the hopes to have a positive impact on society.

Recap: Examples of Corporate Social Responsibility

There are many different ways to go about creating the best CSR program for your company. In the examples above we have seen how different companies take different approaches. Some give back to the community, some give back to their employees, and some do both. Overall, having a solid giving program is key to not only helping the reputation of your company, but to also make employees love where they work.

Interested in discovering how to create a great CSR program through Alignment? Request more info from Involve and start accomplishing your CSR goals today.

Briefly define corporate social responsibility (CSR) in your own words.

How is your selected company accountable to itself, its stakeholder and the public?

Find a current event in the past 1–2 years in which your selected company went above and beyond to demonstrate corporate social responsibility (CSR), or, where they may have sorely failed to demonstrate CSR.

In your post, provide the name of the company and the good or bad deed.

Do your findings change the way you will support the company in the future?

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What is Socially Responsible Investing?

Socially Responsible Investing (SRI) means different things to different people. For you, it could mean aligning your investments with your values. It could also mean investing in a portfolio of companies that meet a minimum standard of sustainability. At Hansen’s, our job is to help you determine what SRI means to you and create a portfolio that reflects your unique values.

SRI was initially used purely as an additional layer of analysis beyond just the traditional financial analysis. SRI provides a qualitative analysis of a company or an analysis of the quality of the company itself. This analysis allows us to mitigate the risk inside of a portfolio by ruling out companies that are inherently unsustainable, and therefore riskier, and to invest only in companies that meet a minimum standard of sustainability. Because the risk inside of socially responsible portfolios is reduced, they have historically outperformed traditional investment portfolios.

To determine which companies are socially responsible, analysts evaluate these companies using Environmental, Social, Governance criteria, or ESG.

What is ESG?

Environmental, Social, Governance, or ESG, are the criteria that are used by financial analysts to determine how Socially Responsible a company is. For Environmental, companies are screened for their records on pollution, water usage, energy efficiency, and supply chain and product sourcing sustainability. Social refers to product safety and employee relations. More specifically, how well employees are treated, if they are paid a living wage, provided benefits, and can move up within the company. Governance, or Corporate Governance, evaluates executive compensation as well as board and corporate racial and gender diversity.

What Does This Mean For You?

At Hansen’s Advisory Services, we will sit down with you to determine what is important to you. Then, using ESG criteria and several other analytical tools, we create a portfolio that is reflective of your unique values. This portfolio is also developed in consideration of your risk tolerance and financial plan.

Once the portfolio is created, we will review our process with you, so that you fully understand what companies you are investing in, and how that relates to your overall financial plan. By investing in a socially responsible portfolio, you are not only investing according to your values, but you are well positioned to meet your financial goals, as these types of portfolios have historically outperformed traditional investing.

Socially Responsible Investing Performance

Research reports show that when companies score well on ESG criteria they may outperform ones that do not.

ESG ratings are based on the use of Environmental, Social and Governance criteria to manage risks within a portfolio.

The S&P 500 is an index made up of the largest 500 companies with the highest market value of the stocks listed on the US stock exchanges.

MSCI KLD 400 Social Index was launched in May 1990. This is one of the first Socially Responsible Investing (SRI) indexes. This index aims to select companies with the highest ESG ratings from the S&P 500 index.

Shareholder Advocacy

When you invest in a socially responsible portfolio, you are doing more than just aligning your investments with your values. Shareholder advocacy is a growing movement in the United States and around the world, enabling you to leverage your financial stake in a company to effect change. As a part owner of a publicly traded company, you have shareholder rights. These rights include filing shareholder resolutions, voting on resolutions, and directly engaging with the company.

At Hansen’s, our portfolios often consist of working with socially responsible money managers. If you invest in this type of portfolio, shareholder advocacy is done for you. They vote your shares using proxy voting, and they file resolutions and directly engage with the company on your behalf. Because the managers have a much larger stake in the company than an individual stockholder might, they are able to have a greater impact.

Shareholder advocacy has had a tremendous impact on companies all around the world on issues like climate change, women’s rights, clean water, employee rights, and racial and gender diversity. Money managers are well positioned to continue using these tools to address issues like the opioid epidemic and plastics pollution.

To find out the impact of your socially responsible investment, please contact us.