Corporate Social Responsibility (CSR): How To Ensure Impact For All Shareholders

The last couple of years have showed us that the separating work from our personal lives and what we care about is no longer an option. During this climate of the so called, ‘war for talent,’ it is critical for companies to connect with what employees view as a priority for them to want to be fully engaged for the long haul. According to a 2020 report by Wave X, 88% feel it is no longer acceptable for companies to just make money; companies must positively impact society as well. 95% believe that business must benefit all stakeholders (e.g., customers, employees, suppliers, communities and shareholders), not just shareholders.

But without a clear purpose and defined approach to a company’s giving strategy, leaders can find themselves having to answer to every initiative that employees care about. Soon managers are avoiding the very conversations they should be having because they’re afraid of what employees are going to be upset about that the company did not fully support. There’s always a holiday that didn’t get celebrated, a charity that is being overlooked or a movement that is not being prioritized by the company.

This happens because corporate social responsibility is often treated as an open gate where anyone and everyone can pitch things that the leadership should focus on. But the larger a company gets, the more this becomes simply untenable. Once a company identifies their purpose, strategy and policies for their corporate giving and community building efforts, the more focused employees can be with what they bring to their managers and leadership.

Below are a few steps that can help your organization align its efforts and ensure positive impact for all shareholders:

Get clear on the company’s purpose. This goes beyond turning a profit. In fact, from the same Wave X report, 93% of employees believe companies must lead with purpose. Who is the company helping and why does it matter? What community does the consumer live in and how is that reflected in the employee base? Once the company is clear on the bigger picture impact it wants to make, then you can start building out a strategic corporate social responsibility (CSR) strategy.

Identify the CSR drivers. This could cover several areas. Common drivers include economic growth and operations, collaboration with key communities that reflect the employee and consumer base, empowering employees, social just & reform and environmental sustainability. These are all critical areas to consider when deciding what to prioritize for CSR. Social just and reform is a relatively new driver for many organizations. However, in the recent years of the Me Too Movement and Black Lives Matter, many employees have demanded to see their companies take action.

Define the CSR vision and goals. Getting clear on what positive impact would look like will help everyone understand why the company may choose to commit to an effort and why it may pass on other quality and meaningful opportunities. In the end, no company can do everything and fight for every cause. After all, if the company is not strategic about where it puts its resources, there may not be a company at all. But when it gets clear about what impact in each of the driver areas benefits all stakeholders the most, it is easier for employees and consumers to understand why some efforts don’t get the same or any attention as others.

A recent example of what happens without this clarity is the backlash from employees that The Walt Disney Company received when the senior leadership chose to not publicly oppose Florida’s ‘Don’t Say Gay’ bill. Now that the company reacted to the backlash by openly condemning the bill, they are now, according to a recent New York Times article, in danger of losing their special tax status in Florida. Their back and forth has caused different stakeholders to lose faith in the company’s priorities. The lack of purpose and clarity ended up alienating people on both sides and hurt the company’s credibility with employees, shareholders and local legislators.

Taking a clear stand from the beginning would have still alienated some people from one side of the fence but would have solidified their employees’ commitment and the LGBTQ+ community, that the company has had a positive longstanding relationship with.

Focus on building strong partnerships. Doing pet projects with no real substance might feel like the company is doing a great deal but the impact will usually be surface and minimal. The strongest opportunities will come from areas where the business already has a presence. Finding partnerships where there are mutual interdependencies and benefits help foster the greatest value creation for all involved.

Find the right partners. Too often leaders through CSR resources towards the first organization to ask for their help, with little due diligence to see if the partnership is based on genuine, long-term benefits. Before committing to a partnership, it’s important to determine the benefits that the company and the partner bring to the table and stand to receive. Is it balanced for both sides? Other critical factors to consider is the partners credibility, fiscal health, transparency and track record of results.

Embed the CSR policy into an engagement strategy. Once the strategy and policies are in place, it’s critical for employees, consumers and shareholders to know what it is, why the particular goals were chosen and how they stand to benefit, as well as what opportunities do they have to join in and help support these efforts.