Nearly 90 percent of consumers will purchase a product because a company advocates for an issue they care about, while 76 percent will refuse to purchase a company’s products or services if it supports an issue they oppose, according to a 2017 Cone Communications CSR Study. Companies are taking note of these strong preferences. In fact, a whopping 93 percent of companies now publish annual corporate social responsibility (CSR) reports, according to Double the Donation. The takeaway is clear: Understanding the evolving nature of CSR is critical to harnessing its full potential.
Here’s a closer look at why CSR matters, and one place aspiring business leaders can gain an invaluable inside edge in the field.
What is corporate social responsibility?
Investopedia defines CSR as “a self-regulating business model that helps a company be socially accountable -- to itself, its stakeholders and the public. [...] To engage in CSR means that, in the normal course of business, a company is operating in ways that enhance society and the environment, instead of contributing negatively to them.”
Main CSR issues may include environmental management, eco-efficiency and sustainability, responsible sourcing, labor standards and working conditions, employees and community relations, gender balance, social equity, human rights, good governance, stakeholders’ engagement, and anti-corruption measures.
Why CSR matters
In addition to being good for the planet, CSR is also good for the companies which practice it. For starters, in an era in which consumers have access to more information than ever before, establishing a positive public image is imperative. Not only that, but companies that incorporate CSR into their business strategies give consumers something to feel good about when buying their products and services, thereby improving not only public image, but also consumer relationships.
CSR is also an opportunity for positive media coverage for your company. In an era where bad news spread quickly, opportunities for good news are important. Passion Lilie founder and lead designer Katie Schmidt told Business News Daily, “What the public thinks of your company is critical to its success. By building a positive image that you believe in, you can make a name for your company as being socially conscious.”
So CSR is great for businesses, consumers, and the planet at large, but it’s also good for two other key groups: employees and investors. Symantec head of global diversity, equity and inclusion, Susan Cooney, says, “The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue.” Double the Donation adds, “If a corporation is philanthropically minded, job-hunting individuals are more likely to apply and interview for available positions. Once hired, employees who are engaged will stay with a company longer, be more productive on a daily basis, and will be more creative than disengaged workers.”
Investors, meanwhile, care about CSR for many of the same reasons consumers do, and are therefore attracted to supporting companies that embrace CSR.
Why keeping up matters
CSR is here to stay for the foreseeable future, but it’s not static. In fact, new developments are constantly changing the landscape of CSR. For example, in a recent Forbes piece, American Express Foundation president Timothy J. McClimon highlights five CSR trends for business leaders to watch for in 2019, including businesses seeking to engage in more dialogue on the issues; the emergence of more formal coursework in CSR and sustainability; increased attention to disaster planning and prevention; and the addition of equity to push for diversity and inclusion.
But will these issues still be relevant in 2020 and beyond? According to McClimon, while some may continue, they may also be superseded by other topics. So CSR is dynamic -- and may differ from company to company.
While we may not know exactly what the future holds for CSR, we do know that it matters a lot -- especially to Millennials and Generation Z who have made their voices heard about everything from global warming to workplace diversity.
Where socially responsible investment fits in
CSR is closely related to socially responsible investment (SRI), which Investopedia defines as “an investment that is considered socially responsible because of the nature of the business the company conducts.” This includes seeking out companies engaged in causes ranging from social justice to clean technology, while avoiding ones deemed to fall short on ethical and political grounds.
Harvard Business Review says of changing attitudes about CSR and SRI, “The result has been an increasing demand for integrating Environmental, Social, and Governance (ESG) criteria into investment decisions. In the beginning of 2018, $11.6 trillion of all professionally managed assets—one $1 of every $4 invested in the United States—were under ESG investment strategies, a sharp increase from 2010, when the amount was close to just $3 trillion overall.”
Preparing the next generation of business leaders
Clearly, the next generation of business leaders have a lot more to focus on than just profit margins. This is where ESDES, the business school of Lyon Catholic University, comes in.
With a focus on acknowledging the importance of social and economic change, ESDES uniquely positions its graduates to lead responsibility in the globalized and digital world. Sustainable business development is not easy, and its achievement requires the right knowledge and approach. To that end, ESDES has translated a foundation of humanistic values into three management teaching initiatives: collective performance, which acknowledges the role of teamwork in the success of a project; diversity and openness, a must-have in a globalized and digital world in terms of understanding and interacting with different communities; and citizenship, which prioritizes awareness and consideration of our actions on society within a responsible economy.
Offering a three-year, English-taught B.A. in Global Business Development with the student’s choice of specializing in digital marketing or international business in the third year as well as a two-year, English-taught Master in Management, ESDES keeps ethical, social and responsible behavior at the forefront. Its location at the heart of Europe’s international economic region of Lyon, meanwhile, means many opportunities for practical experience in the form of internships and jobs for students and graduates.
Tomorrow’s complex economy requires more than business knowledge from its leaders; it also requires that this knowledge sits within the context of the contemporary business world. Through its commitment to producing responsible manager-entrepreneurs, ESDES distinguishes itself as an innovative answer to the challenges of our times.