The Benefits of Corporate Social Responsibility in Today’s Business Landscape

Well-planned and properly-implemented CSR initiatives bring about benefits such as a strengthened investor confidence on your business. Find out how!

Many of you may have some idea of what Corporate Social Responsibility (CSR) is. But what exactly does CSR mean and why should companies adopt socially responsible practices?
 
Defined as a concept whereby companies integrate socially- and environmentally-friendly practices into their business operations, CSR efforts vary among businesses. Whether it is through philanthropy, green practices or community involvement, the concept of CSR has evolved significantly since the first United Nations Conference in 1972 on the Human Environment in Stockholm.
 
While an older generation of business leaders consider CSR as window-dressing or an extension of their public relations efforts, today’s leaders want and are determined to make a societal or environmental difference. But before CSR can be truly fulfilled, it has to be part of the company’s DNA. Leaders are now likely to discover that sustainable business practices underpinned by a mix of social responsibility and good corporate values have the potential to bring tremendous value to their organisation.
 
With that said, there are also sound reasons behind businesses’ lack of attention to CSR. Market fluctuations, talent-management issues and globalisation have given rise to an extremely competitive business environment in which corporates busy themselves with the task of generating profits.
 
In Singapore, SMEs are more concerned with building their businesses while grappling with high operation costs, tight overheads and a lack of manpower than strengthening their CSR. A focus on dealing with these challenges has hindered organisations – big and small – from giving back to the communities they belong to.
 
Rising Tide of CSR

Government-backed organisations such as Singapore Compact and Social Enterprise Association provide local companies with the tools they need to develop good and sustainable business practices. In fact, in recent times, more and more local organisations are stepping forward to support causes that are closely in line with their company’s core values and culture.
 
Additionally, the Singapore Exchange (SGX) recently announced that companies listed on the exchange will have to publish mandatory sustainability reports in the coming years. Apart from garnering more investor interest here, this move signals a shift towards bigger organisations’ greater transparency and responsibility.  
 
With this, leaders have to look towards integrating CSR initiatives into their company’s framework. This gives them an opportunity to strengthen the interest shone on their business while contributing to society in a meaningful and responsible way.
 
Building Brand Image

Organisations know that forging a good reputation and image is extremely important. In our inter-connected environment, stakeholders have access to plenty of information with regards to how an organisation treats its employees, whether its products are of environmentally-friendly standards and whether it supports the community it operates in. This also means that companies are held more accountable for their actions.
 
In fact, one of Singapore’s oldest banking institutions, OCBC, is recognised for giving back to society with their yearly OCBC Cycle. The event sees cyclists from all skill levels and walks of life come together to raise funds for causes such as the National Cancer Research Fund. Its efforts have done well in forging a trusted public image as well as helping to cultivate good cycling habits among Singaporeans.
 
Positive Company Culture

This is a universal truth – happy employees make positive, productive ones. Since companies ought to put their employees at the heart of all they do, they should seek employees’ preferences when sourcing for causes to support. The initiatives should also be carried out with the intent of creating bonds among employees from all departments and promoting the company’s culture.
 
Ritz-Carlton has done well in promoting CSR responsibility among its employees. Its CSR team is made up of volunteers from different divisions of the company who meet regularly to plan campaigns for their annual Community Footprints initiative. Through their collaboration with educational and charitable bodies, the hotel brand makes known and exemplifies the organisation’s culture of quality service and social responsibility.
 
By drawing ideas from companies such as OCBC and Ritz-Carlton, organisations can better engage their employees and characterise values they strongly believe in, such as that of inclusiveness and social responsibility.
 
Attract and Retain Talent

In our highly-competitive job market, effective CSR programmes can position your company as an employer of choice to potential employees. This is because today’s workers are looking for more than a competitive salary and comfortable work environment in their careers – they want to find meaning in their day-to-day work.
 
In CareerBuilder US, employees are allowed two days of paid leave to partake in community and environmental work. When put in a local context, companies in Singapore can engage senior and junior executives by encouraging them to form teams to implement green initiatives in the workplace or dedicate time to support a worthy cause.
 
By promoting environmentally-friendly practices that contribute to the betterment of society, companies will be better able to retain their most talented employees who strongly value what they value. Furthermore, they will be better able to fulfil society’s growing expectations of their business.  
 
Healthy Investment
 
Should a company’s actions and policies raise societal or environmental concerns, these actions must be disclosed. This is because full and transparent disclosure allows investors to trust these companies, and with trust comes a willingness to take a deeper look into a company’s business.  
 
For instance, an organisation involved in construction would need to make known that they implement sustainable practices on two fronts – the environment and their labour force. Full disclosure of their land-clearing practices, material usage and labour practices is required not only to meet global sustainability guidelines, but also create risk awareness among shareholders in order to earn their trust and confidence.
 
In this electronic age where information about a company’s environmental and labour practices are readily available online, organisations are now even more accountable for their actions. A good CSR plan helps companies engage with their communities, cement investor confidence on their business, inculcate in their employees a sense of positivity and ensure long-term business sustainability.