How corporate responsibility became the trump card of organizations

Friends, we are probably not telling you a secret here, but in recent decades the awareness of the social and environmental costs involved in corporate activity has been increasing: violation of human rights, exploitation of workers, pollution of the environment, etc. Employees, suppliers, consumers and investors began talking about concepts like "carbon footprint", "employer transparency" and "business ethics" and the demand for corporations to present, in addition to the product, also the long-term social impact, became stronger.

In simple words, there is an expectation from companies and organizations to "volunteer" and take corporate social responsibility (CSR) to create added value for the benefit of the environment and society as a whole. At face value, it sounds like another expense in an ocean of expenses during a recession. But we want to offer a slightly different perspective on how things can be improved:

Within the organization – employee welfare, promotion and equal opportunities, fair management, ethics, etc. Outside the organization – the development of technology that promotes social goals and values such as environmental sustainability, equal opportunities in medicine, the advancement of women, making services accessible to weaker sections of the population, philanthropy, and more.

So the public gains meaningful and real change, but what is in it for corporations? According to a survey conducted by Liberal magazine in collaboration with IPANEL in 2022, which examined the influence of values on the consumer and work patterns of generation Z, it became clear that organizations that took responsibility and adopted a social-environmental significance to their business activities, translated the meaning into money. And a lot of money: approx. 70% (!) of the respondents answered that they would pay more for a service or product from a company whose values they identified with.

More advantages in adopting meaning for organizations that you didn't think about?

Recruitment – in a study by Liberal magazine, 72% of respondents said that doing good had significant value when choosing a workplace, and 64% of young people would consider accepting a lower salary in a job that promotes their values.

Employee welfare and retention – an organization that prioritizes employee welfare and the work environment, strengthens the sense of belonging and loyalty to the organization.

Reputation and image – an organization that supports social values, and operates transparently and fairly, portrays itself in a positive light, builds an emotional connection to the brand and leaves a long-term impact. Did someone say seal of approval?

Impact on the profit line – a brand that has created an emotional connection with a consumer has a direct impact on the consumer's decision to enter a transaction. For example, a Nielsen study conducted on 30,000 customers in 60 countries showed that 66% of consumers are willing to pay more (!) for products from organizations with social responsibility.

A gateway to business opportunities – taking social responsibility may open doors for the organization, to media coverage or business collaborations with organizations whose activities are complementary and can reach an additional audience.

Attracting investors – belonging to an exclusive circle of organizations that are a priority among investors interested in developing technologies with social impact, contributing to the environment or promoting social goals. In fact, the trend of investing in organizations that promote social responsibility is on the rise, with total investments of 3 trillion dollars in 2004, which rose to 35 trillion dollars in 2020 and are expected to jump to 40 trillion in 2024.

Risk management – an organization that emphasizes employee welfare, fairness in the supply chain and transparency significantly reduces the risk of lawsuits and regulatory hurdles in the field.

Efficiency and saving – an organization that is mindful of the environmental price and directs its activities accordingly, saves resources, creates awareness and educates employees about efficiency and economy.

Innovation and learning – the implementation of corporate responsibility conveys concern to employees and encourages learning and development, personal and organizational.

High-tech companies – the right people, at the right time and in the right place. The fact that high-tech stands at the forefront of technological development, together with the power to harness the knowledge, skills, big money and advanced technology to promote social and environmental goals and values - gives high-tech a significant advantage. These companies benefit from massive investments, a positive image, sympathetic coverage and public support.

In conclusion, the benefit that corporate social responsibility yields, for all sides of the triangle – the organization, the employees and society – leaves no room for doubt. It is very profitable for organizations to play a role in creating shared values.