I believe that to be socially responsible as a business is both morally and commercially the right thing to do.
However, I’m not a fan of the term CSR, which many companies use. It’s an acronym that stands for Corporate Social Responsibility. As it places too much emphasis on ‘corporate’ and not enough on the social aspect. It leads to this too often becoming a tick box exercise where the business does the minimum to prove it is addressing social responsibility.
Being socially responsible means that businesses, in addition to maximizing shareholder value, must act in a manner that also benefits society.
Social responsibility has become increasingly important to investors and consumers alike. The former seeks investments that are not just profitable but also contribute to the welfare of society and the environment. The latter are looking to consume more consciously and to buy from organisations who can demonstrate that they too contribute positively to the welfare of their staff and of society and are taking moves to become more sustainable.
Critics of this approach might try to argue that the basic nature of business does not consider society as a stakeholder. But it is and an increasingly important one at that.
To some extent, this is where the agenda has broadened and is now often referred to as ESG – Environmental, Social, and Corporate Governance. Which is an evaluation of a firm’s collective conscientiousness for social and environmental factors.
It is typically a score or a rating that has been compiled from data collected surrounding specific metrics related to intangible assets within the business.
While diversity and inclusion are quite rightly given their own platform outside of social responsibility, one could argue that a business’s approach to diversity and inclusion affects its level of social responsibility.
There are many brands that are now proactively demonstrating on an ongoing basis their focus on being socially responsible.
Here are just a few examples:
When talking about social responsibility, Starbucks describes the fact they need to be laser-focused on intention, transparency, and accountability when it comes to this, and all things related to being a socially responsible business. This is the fundamental difference between ‘talking a good game’ or ticking a corporate tick box to deliver real and meaningful change in this area.
Let’s not forget that Millennials and Gen Z are both the current and future customer base for all consumer-facing brands.
If you have any doubts that Millennials care about a brand’s social impact:
(Source: Rudominer, 2017)
If you ran this survey today the percentages would be much higher and if you ran it for Gen Z, then each stat would almost certainly be in the 90% range.
On the other side of the pond, a Cone Communications survey also found that 87% of Americans will purchase a product because a company was supporting an issue they cared about, and millennials have shown that they are more likely to research to see what a company cares about and what they contribute to, than other generations.
There’s no escaping the fact that if you’re not socially responsible, you will be held to account by your customers. And by that I mean they will simply switch to a brand that demonstrates the behaviour they identify with when it comes to social responsibility.
As I said at the outset, to be socially responsible is both morally and commercially the right thing to do.
The luxury goods group Kering understands this. They are clearly authentic in their approach to sustainability and CSR. They own various brands including Gucci, Alexander McQueen, and Balenciaga. Over a decade ago in 2011, they created an ‘E P&L’ specifically to measure the impact of their sustainability initiatives and to enable them to make better decisions about their supply chain.