The concept of Corporate Social Responsibility isn’t new. Since the 18th century, Cadbury and Johnson & Johnson have incorporated social responsibility into business practices; however, the notion was far and few between. While corporations today are expected to have some form of social responsibility integrated into business practices, it begs the question: why?
Most top business executives have come to agree that Corporate Social Responsibility (CSR) matters. In fact, according to the PWC 2016 CEO survey, 64% of CEOs believe CSR is core to their business, while the Reputation Institute ranks CSR-centric values as the major contributing factor to corporate reputation. Taking these two facts into consideration, Mitt Romney wasn’t wrong when he famously stated in 2011 that “corporations are people” but, he wasn’t exactly right either. Although, he did have a point. In day to day life, people have an impact on their environment. They make choices that have consequences and must live with those consequences. They’re guided by personal values and missions – reasons for existing. Corporations, while made up of people, act in similar ways, but on larger scales. The choices they make have consequences that they must live with. They’re guided by values and missions. They have a day-to-day impact – and impact is what it boils down to. A single individual may value saving the forest, but there isn’t a lot a single individual can do. For example, a paper mill needs forests and may value sustainability. As a large entity the paper mill can make a substantial impact on deforestation than the individual simply because it has a greater set of resources. On the other hand, corporations also make a more significant negative impact. If the paper mill chose not to care about sustainability, they would still be impacting the environments it operates in. However, if it were to not care, it would give itself a deadline for business. Just like people, corporations want to exist for as long as possible, and by not caring about its negative impact it is simultaneously writing its own death note which argues that CSR just makes good business sense.
It also makes good business sense because stakeholder don’t just want responsible companies, they demand it. With the rise of social media and instant information, pessimists would say the millennial generation is wishy-washy, opinionated and incapable of being satisfied but it’s also a generation that has lived through ruthless marketing and propaganda leading to the second largest economic crash in history and was left with the mess to clean up. It’s no wonder they’re also the most skeptical generation since the Silent Generation while simultaneously being more brand loyal than any other generation. But those loyalties come at a cost. According to a 2015 Cone Communications Millennial CSR Study, more than 90% of millennials would switch brands to one associated with a cause. With millennials representing $2.4 trillion in spending power, it’s in the best interest of corporations to give them what they want – socially responsible organizations.
But it’s not just where they spend their money – millennials, who are estimated to make up 75% of the workforce by 2025, prefer to work at organizations that are socially responsible. The 2016 Cone Communication Millennial Employee Engagement Survey found that 64% of millennials consider the social and environmental practices of a company when deciding where to work and the same percentage won’t take the job if the company doesn’t have strong CSR values. Additionally, 75% say they would take a pay cut to work for a responsible company. Comparing these numbers to Gallup’s finding that only 29% of millennials are engaged in their current job, CSR practices then offer an opportunity for businesses to engage and align with employees.
Corporate Social Responsibility matters because it adds value to corporations and the people that make them up. Individuals demand it because it gives purpose to the menial tasks of everyday living, purchasing and working. Corporations need it to be sustainable and contribute to its purpose. CSR matters because it is the effective way to impact business and stakeholders simultaneously.
Janine De Iorio 