In a nutshell: Social action can help you build your business by fostering stronger connections with customers, investors and the public.


Your organization knows how to make money, but does it know how to make the world a better place? That’s a question being asked frequently today, as customers and other stakeholders expect companies to commit to some kind of corporate social responsibility (CSR) activity — that is, to invest time, money and other resources in social causes.

The list of companies with strong CSR programs is growing. Google and Apple are leaders in reducing energy use and carbon emissions. Ben & Jerry’s stopped using milk from cows treated with controversial recombinant bovine growth hormones (rBGH) in 1989. Warby Parker, an online eyeglass and sunglass company, helps provide free eyewear for people in developing countries.

CSR is closely related to the Triple Bottom Line (TBL). The Financial Times says that CSR is an admittedly vague subject that encompasses many types of thinking:

“CSR is a concept with many definitions and practices. The way it is understood and implemented differs greatly for each company and country. Moreover, CSR is a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability.”

The Economic Case for CSR

CSR proponents say that social responsibility is much more than an exercise in public relations. They are quick to point out that business performance and social responsibility are not mutually exclusive, and that companies with CSR programs build stronger connections with customers, investors and employees.

In addition, researchers have found a link between CSR and sales. In 2004, Nielsen reported that consumers around the world want to buy from socially responsible companies. Among them, millennials — 51 percent reported that they’d pay more for products considered sustainable.

“It’s no longer a question if consumers care about social impact. Consumers do care and show they do through their actions,” according to Nielsen. “Now the focus is on determining how your brand can effectively create shared value by marrying the appropriate social cause and consumer segments.”

Not Everyone’s on Board

While CSR is definitely growing in popularity, critics believe these efforts are not necessary, or even counterproductive.

Common arguments:

  • Deciding which charities to support is arbitrary
  • CSR detracts from the mission to make profit for investors
  • Social causes might become too dependent on corporate donations
  • The money spent on CSR should be distributed to shareholders, who can make individual decisions about spending the money

Getting Started with Corporate Social Responsibility

If you’re considering a CSR program, the first step is to decide what causes to support. Ideally, CSR should be related to your company’s mission. For example, a restaurant might support a charity that fights childhood hunger.

The second consideration is how you will measure performance. Simply counting the number of hours or dollars spent on charitable causes will not suffice. To start, set clear goals of what you want to achieve, and then determine a quantifiable way to track results. If you’re working on sustainability, some measurements might include a reduction in carbon footprint or savings in electricity.

Don’t be too modest when it comes to CSR. You want your stakeholders — especially customers — to know what you’re doing and why it’s important to you. Frequent reporting is a best practice, and don’t be afraid to solicit input. If you’re required to file financial reports, include a section on your CSR efforts. You can also create a CSR page or minisite on your organization’s website.


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