How can you use behavioral economics to increase the impact of your CSR initiatives?

Behavioral economics are connected to everything in our life, although overlooked most of the times. It basically means that people will not be as rational as traditional economics assume, rather will have different behaviors in reality. Therefore, many of the suggested approaches in this article would be more impactful to integrate the CSR strategies into businesses more than the mere fact that they are good for the organization and societies where they operate at large. This comes down to the issue of uncertainty, where consistent biases in the way people make judgments are found in reality. Individuals often rely on easily recalled information, rather than actual data, when evaluating any decision, including the one about adopting CSR.

Nudges have pros and cons. One of the more important ways you can use a nudge is to carefully evaluate what a “default” option should be. For instance, if the default options for a pension allocation would be to “sustainability” options this would be a significant nudge. People can always opt out but this is less common. However if people feel the options are too “paternal” or forced than the default option can backfire and cause more push back.

Behavioural economics is often seen as a science (as it sort of is one) but for communications you have to drop a bit of that idea. Don't treat people as groups, treat them as individuals with unique and fundamentally relatable motivations. It shouldn't be 'people in the UK between 21 and 45 do X', it should be 'a person in this situation is likely to appraise and act in this way'. After you've made the nudge compelling to the individual, it'll extrapolate onto larger populations.

Utilize nudges to encourage positive behavior. For example, make it easy for employees to participate in CSR initiatives by offering automatic enrollment in donation programs, or by simplifying the process for volunteering. Default options can significantly impact participation rates.

One of the key insights that behavioural economics provides is empathy. Understanding the CSR initiative and creating a long term impact can be maximized with the right combination of empathy and a nudge. For example; Providing a mental conditioning support system to athletes to enhance their performance and look after their mental well being. This is an initiative where CSR funding can play a key role. One can help the donor understand the impact that CSR can play by sharing real life success as well as stories of struggle. We can both quantify the same as well as give it a human touch

By highlighting the positive impact initiatives can have on individuals, communities, and the world, you not only inspire people to participate but also create a sense of belonging and shared values. This genuine emotional connection is key to fostering genuine support and engagement.

Framing your CSR initiatives in a way that resonates with the emotional and moral values of your target audience also helps. For example, emphasize the personal impact on individuals or communities rather than abstract statistics. People are often more responsive to personal stories and emotions.

It helps when the message is personal, i.e. it comes from a real person with a real story behind it, not some lofty messages with confusing jargon. For example, at Open English, the company has a way of conveying its message "English changed my life". Every employee was encouraged to think about how English changed their life for the better; and when it is time to help customers, other employees, or even strangers, their stories become a powerful motivation that push them to work even harder for the common goal.

Everyone collects data, and everyone measures productivity and profits. A simple nudge for increased profit is forcing front-line sales agents to collect certain pieces of information from the customer. Whether it's MEDDIC or a different methodology, the end result is much higher customer conversions. In your CSR initiative, these same inflection points exist, and they must be identified. Find that first domino that causes the most to fall, or find the most fallen dominoes first and replace the first one. Ask the right questions from your data, or deep dive into current inputs from your workforce. Find the crucial levers that exist between your people, product, and currency. Data may be substituted for currency!

Showcasing the result of previous CSR initiatives conducted successfully by the entity will also help to increase the understanding among people involved about the capability of the organisation to create and implement such programs. In most of the cases entities are "goodwashing" themselves by providing false information about the CSR initiatives they are involved in.So it will be a refreshing change to publish more information on the CSR works done and results obtained from the process for the general public or stakeholders to make their own decision.