Corporate social responsibility (CSR), the term given to companies’ efforts to deliver economic, social and environmental benefits alongside great products and services, is not always a favorite topic in business meetings.
The idea of “giving back to the community” certainly has its appeal, and there’s no doubt that it makes for a great press release. But contributing to society at large is often a much lower priority for companies than turning a profit. Frankly, the idea can even sound kind of hippie-dippy, at first. I know I was skeptical.
But that was before I began implementing elements of CSR into my own business strategy. It didn’t take long to realize that, although I did find those elements personally fulfilling, the benefits stretched far beyond making me feel good. They made my company better, stronger and more relevant – and not just from a public relations standpoint.
CSR might be the last thing on an entrepreneur’s mind when he or she sets out to start a successful business, but I’m now convinced it should be part of a company’s culture from day 1. Not just because it’s the “right thing to do,” though it is, but because it can also give you a competitive edge. Philosopher Henry David Thoreau said that “Goodness is the only investment that never fails.” Here are five reasons why:
1. A healthy society breeds a healthy business.
Guess what? If the communities that you rely upon for your business are struggling, your business is going to struggle, too. After all, a successful world is necessary for your products or services to grow and mature in a healthy economic environment.
Good luck founding a successful startup if the economy is in crisis. You can’t engage with customers if they’re so worried about paying the bills and societal issues that they don’t have time to consider your innovative offerings. Promoting a happier, healthier society makes sense for any business, because a peaceful and prosperous society is a prerequisite for a thriving business.
2. Responsible practices result in cost savings.
Cost-efficiency is one of the first responsibilities of any entrepreneur, and engaging in responsible, sustainable practices can be a great way to cut costs. Using less packaging or slashing energy waste doesn’t just help conserve environmental resources – it helps conserve spending, too.
GE’s corporate office achieved energy savings of 57 percent simply by eliminating all fluorescent bulbs in its headquarters and replacing them with energy-efficient ones. That was an environmentally responsible choice, sure, but the decision also saved the company money. It's what I’d call a win-win.
3. CSR results in brand differentiation.
Giving back in a tangible way can be a terrific way to set your company apart from your competition. A great example is TOMS. For every pair of shoes the footwear company sells, it donates a pair to a child in an impoverished region.
TOMS call this its “One For One” business model, which also immediately differentiates the company from its numerous competitors selling slip-on shoes. The company is doing something good that others in its industry aren’t willing to do.
4. Making your company stand for something creates employee buy-in.
In most industries, competition for the best employees can get fierce. Making your company stand for more than profits gives employees an easy reason to believe in your corporate vision, and when prime job candidates see your business tangibly contributing to society, they’re more likely to want to be a part of what you’re doing.
I’ve also found that employees give more of their heart and soul to your business when your business does work that actually touches their hearts and souls.
5. CSR pumps up consumer demand.
More and more, consumers simply expect businesses and corporations to help make the world a better, nicer place. That might seem, to many would-be entrepreneurs, like a strange burden to place on a money-making enterprise, but it’s essential to see CSR as an opportunity.
How many marketing dollars are you willing to spend to positively connect with consumers? Often, responsible giving and conservation can help accomplish the same task more effectively for far less cost. Millennials, in particular, are very committed to the idea that businesses should be good citizens, and their age segment now represents about a quarter of the entire US population, with US$ 200 billion in annual buying power, according to Forbes. Best to keep them happy!
So, if corporate social responsibility makes you feel good and makes your customers feel good, why aren’t you making it part of your core company values?
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This article originally appeared on Entrepreneur.com. Minor edits have been done by Entrepreneur.com.ph.