A CEO’s Guide to CSR

No one will be surprised that I love the growing trend of social impact or corporate social responsibility (CSR) across industries these days. Part of what excites me about CSR is corporations’ access and resources that can, in many ways, extend far beyond the capacity of nonprofits. Many businesses are waking up to the fact that this new engagement offers them the ability to make major positive impact in the world and their own backyards. 

Current views on CSR vary widely, ranging from cynical to hopeful, and new examples are popping up each day. For CEOs who are considering adding impact to their companies’ priorities, I’ve mapped out the spectrum of engagement to consider based on what you're driving for with your social good programming? Here are my observations. 

CYA and Risk Mitigation

The most cynical view of CSR, unfortunately, can be backed up by examples of more than one company today. Picture a corporation that sells alcohol publicizing its support for Mothers Against Drunk Driving, or a social media company touting the importance of internet safety in its ads while making no changes to its product. 

These are “cover your ass,” or CYA, programs on the CSR spectrum. Rather than being about doing good, they are about corporate risk mitigation. Their brands have latent negatives, and management has discovered that CSR could be a good way to counter those negatives. 

If CYA programming has a net positive result, I say we’re still better off. But CEOs, beware of CYA that poses as CSR. Consumers can usually sniff out a fake. Even the term Corporate Social Responsibility has been challenged over the past 10 years because it’s been equated with these hollow campaigns. 

Reputation-Focused

One step in the more hopeful direction is a common use for CSR: reputation building. The companies that fall on this part of the spectrum don’t necessarily have latent negatives to combat, but they want to give their brand a boost toward “do-gooder” territory. 

The reasons are clear, especially for B2C (business to consumer) corporations: Accenture research has shown that 62% of consumers worldwide want companies to take a stand on social issues, and there are many other studies that confirm this trend. Millennials are not the only ones asking for more from the organizations they interact with and buy from.

Having ethics and purpose as a company is, in many ways, a business imperative these days, which is why B2B (business to business) organizations have CSR programming almost as frequently as B2C ones. Even if the former don’t have consumer-facing products on which to slap a nonprofit partner logo, they can herald their CSR through their websites and ads. 

Internal Branding

Sometimes CSR programs are geared more toward internal reputation building—specifically, with employees or potential employees. Millennials and members of Gen Z spent time volunteering all throughout high school and college, and most expect that whether they’re neurosurgeons or data scientists, they’ll get to volunteer and/or generally do good at work. There’s plenty of research confirming this.

Employers that don’t offer some sort of purposeful programming are at a serious disadvantage. Job seekers regularly check lists like those of Great Place to Work, whose assessments consider elements like corporate values. And companies run the risk of losing valuable employees to competitors who are offering such programming.

There’s nothing wrong with this impetus for CSR. It’s not the ideal state, but it gets employees and companies involved and can absolutely lead to positive impact.

A Vehicle for Opportunity

The most hopeful and optimistic vision for CSR is using it as a way to open new markets and opportunities. For example, some banks have discovered that microfinance can be a vehicle for reaching the unbanked, thereby simultaneously expanding their customer base and granting opportunity to people in need. 

The best type of CSR is programming that benefits both the company and the communities in which it operates. Michael Porter and Mark Kramer believed deeply in this potential when they coined the term “shared value.” This is the notion of putting societal issues at the core of the company, not at the periphery, in a way that will help both thrive. So rather than donate $X to a charity each year, make social responsibility part of the fabric of your organization and a central part of your success. Instead of siloing it into one part of the company, build it directly into the business from the marketing and sales to the manufacturing and distribution.

Do you have examples of companies in different areas of the spectrum or other views on how companies handle CSR? Please share your perspectives!