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Corporate responsibility is critical now more than ever as global problems rise, from climate change to rising inequality. It is more important than ever for corporations to take responsibility. Corporate social impact has evolved to include social accountability to employees, customers, stakeholders, and local communities. Corporate social impact is like an internal and external responsibility that a company undertakes for profit and purpose to showcase its values.
Social impact is not beyond the reach of successful companies. Corporations don’t need to be the big bad wolf. Given the right tools, there are simple decisions even a multinational corporation can make to support economic and social justice. Here are 4 ways that allow your company to be a part of the social impact ecosystem.
- Corporate Social Responsibility 1.0
- Next level: Corporate Social Impact (CSR 2.0)
- 4 Ways Companies Can Fight for Social and Economic Justice
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Corporate Social Responsibility is not about giving to society; it is about transforming society. KEY TAKEAWAYS Impactful CSR can be achieved :
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Corporate Social Responsibility 1.0
Corporate Social Responsibility (CSR) is a big deal. Fortune 500 companies spend about $20 billion on CSR annually. What’s more, CSR is consumer-driven. Customers want to buy from socially-responsible companies. Common CSR practices are things like:
- employee giving and volunteering
- philanthropic giving
- carbon footprint reduction
- diversity and inclusion
- socially-focused branding
- improved labor and environmental practices in your supply chain
Are measures like these transforming society? Are they impacting local economic and social justice issues? To do that, we need to take CSR to the next level.
Read More: Why ESG Surveys Miss The Mark For Sustainability?
Next level: Corporate Social Impact (CSR 2.0)
To be transformative, programs need to address the social and economic justice that is most pressing to the community. While this may sound obvious, CSR activities often suffer from one-way communication. Traditional CSR doesn’t require listening to the community.
Have you ever seen public exercise equipment that nobody uses? The community likely has more urgent social and economic needs.
How about the altruistic buy-one-give-one policy of Tom’s shoes? It may have put local shoe sellers out of business and didn’t produce evidence of improving kids' lives.
Next-level CSR, or CSR 2.0, can’t be tone-deaf regarding impact. Programs must address critical social or economic justice issues. These could be:
- Economic justice: poverty eradication, income equality, equal opportunity employment, etc.
- Social justice: voting rights, racial injustice, climate change, LGBTQ+ rights, etc.
Harvard Business Review defines corporate social justice as “a reframing of CSR that centers the focus of any initiative or program on the measurable, lived experiences of groups harmed and disadvantaged by society.”
This is far more than just “giving back” to the community; it’s about transforming society. Companies can make a more profound impact through a collaborative process of joint-decision making, relationship-building, and learning.
Read More: Putting the “S” in ESG Social
4 Ways CSR Companies Can Fight for Social and Economic Justice
1. CSR companies need to take a stance
Take a stance on an important social and economic justice issue. Not just one the CEO wants but one that fits your company's expertise, employees, and community.
In 2021, Texas-based businesses such as American Airlines, Microsoft, and Unilever voiced opposition to the state’s support for voter restriction laws.
2. Focus on relationships with stakeholders
Real transformative engagement is a two-way street. The community stakeholders are the reason these programs exist. They are the community that social and economic injustices have harmed. Listen to what these people have to say and allow for joint-decision making.
This means frequent communication, strong personal relationships, mutual understanding, and shared ownership of challenges and solutions.
If you want to focus on racial injustice, engage your African-American employees and partner with Black community organizations. Listen to each community identify the problems and solutions and move forward together.
Read More: 3 Steps to Move from Shareholder to Stakeholder Impact
3. Impact, not CSR activities
“We planted 100 trees this weekend,” the company newsletter proudly declares. What does that mean? Are you addressing climate change with that? CSR 2.0 focuses on impact, not activities.
Trees are good, but “100 trees planted” is only part of the impact measurement. CSR programs should focus on the value and benefits they are creating for stakeholders. What benefits to the community result from 100 new trees? Now we’re talking about impact.
Read More: 5 Ways Economic Development Organizations Should Enrich Impact Data
4. Learn continuously from their CSR programs
Corporate Social Impact should be iterative–a frequent process of trial, and error, learning, and improvement. The continual learning process allows for a deeper understanding of problems and closer relationships with stakeholders.
Perhaps your healthcare company sponsors free annual CPR training. Your goal is the health of the community. Through participant surveys, imagine you learn that most people are participating in job-skill training for employment.
You’ve done some impact measurement: collecting participant data and feedback. Now, what does it tell you about the priorities and issues of this community? How might that affect how you do things next time? This is the key to impactful CSR.
Read More: How does social procurement save corporations from underdevelopment?
Focus on True Impact with your CSR
CSR needs to focus on urgent social and economic justice issues. Companies have been investing heavily in CSR. Now it’s important to zero in on the right approach. Sopact is committed to helping organizations drive social and economic impact. Learn more today and sign up for SoPact’s newsletter IMM Done Right on LinkedIn.
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