Corporate Social Responsibility as a strategy to advance business goals
By Melissa Ann Schmid
As solar companies, we promote clean energy as a viable alternative to fossil fuels, and take environmental responsibility to heart. But how do we ensure we gain and retain customers and employees, withstand market volatility, and maintain a competitive edge?
One popular way of addressing company challenges is the development and adoption of corporate social responsibility initiatives.
Corporate social responsibility (CSR) has become increasingly popular in recent decades. In 2017, consulting firm KPMG conducted an international survey and found that CSR reporting is standard practice among large and mid-sized companies. In PricewaterhouseCoopers' 19th Annual Global CEO Survey, 84 percent of CEOs said their businesses address wider stakeholder needs, beyond those of shareholders alone.
What exactly is CSR, and should your company adopt CSR initiatives?
Many definitions provide insight into the concept of CSR. The World Business Council for Sustainable Development delivers a reputable definition in its publication entitled "Corporate Social Responsibility: Making Good Business Sense" (2000):
"Corporate Social Responsibility is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community, and society at large to improve their quality of life."
Using business as a force for good requires decision makers to consider the needs of many stakeholders, including consumers, employees, and our communities. When we consider how stakeholders' needs align with business goals, it becomes clear that social responsibility is an integral component of business strategy.
According to Environmental Leader, "Companies that focus on the triple bottom line—economics, environment, and social—are the ones that consistently do well by all standards." In a highly competitive global economy, companies must focus on the 'triple bottom line' and seek to quantify the connection between stakeholders' needs and financial performance. This strategic approach makes a significant impact on both the targeted social issue and the company's competitiveness.
In practice, companies develop CSR-minded strategies that reflect their core values, consider stakeholders' needs, focus on business goals, and assimilate to daily operations. Researchers name four key elements that CSR initiatives include:
- Defend or build company reputation and legitimacy.
- Aid cost and risk reduction.
- Achieve business goals.
- Foster value creation via learning and partnerships.
These elements assist us in tracking and measuring outcomes of our CSR initiatives as they relate to overall business strategy.
Let's look at an example of our solar company's CSR initiative, EnergyBin's Giving Back initiative, and how it incorporates the four elements to make a positive impact on the company's triple bottom line.
EnergyBin, a wholesale solar B2B exchange, recently formed a collaboration with the Solar Foundation to support the Solar Saves Lives program, which provides solar and battery storage equipment to areas of urgent need. The initiative aligned with EnergyBin's vision to "increase the adoption of solar throughout the world" and addressed a stakeholder need of providing another outlet for customers to move inventory. When solar companies have equipment that doesn't sell, continuing to carry the stock may not be as feasible as donating product and claiming a charitable tax deduction, which the initiative gives companies the opportunity to do.
The initiative builds company reputation, in that EnergyBin publicly promotes the Solar Saves Lives cause. Over time, stakeholders come to know EnergyBin as a company that is committed to increasing the adoption of solar worldwide.
For every new member referred to EnergyBin by the Solar Foundation, a percentage of each sale is donated back to the cause. The referral program reduces EnergyBin's cost of acquiring new customers.
The newly created inflow of leads from the Solar Foundation helps to achieve EnergyBin's goal of increasing membership. The shared desire between EnergyBin and its members to give back positively affects the company's customer retention goal.
Finally, both parties, EnergyBin and the Solar Foundation, learn from each other as they work together to combine resources and create long-term value. EnergyBin will periodically track measurable parameters to ensure the CSR initiative continues to positively impact the company's bottom line.
Ready to get started with CSR and add value to your bottom line? Here are some basic questions to think about when adopting CSR:
- What are your company's core values, and what is the company passionate about?
- Who are your key stakeholders, and what are their needs?
- What are your company's long-term business goals, and how do stakeholders' needs align with company goals?
- What is your organizational culture like, and how do you want your culture to be in the future?
Incorporating CSR into your business strategy has great potential to positively affect your bottom line and provide the competitive advantage that sets your company apart.
Melissa Ann Schmid is the Marketing Communication Manager at EnergyBin (www.EnergyBin.com).