Business should act more than talk
You might have already heard of Corporate Social Responsibility (CSR)
If no, here is a long definition: CSR is a form of self-regulation that reflects a business’s accountability and commitment to contributing to the well-being of communities and society through various environmental and social measures.
To put it shortly, CSR are the actions that company takes not to generate profits directly, but to contribute to social and environmental ‘well-being’ and ameliorations. It created a better image of the company having such an engagement which generates some profit after all but it is never the primary goal.
How can CSR generate profit?
Today consumers become more and moree mindful of corporate social responsibility (CSR) when making consumption decisions. This is why in the corporate world, to be engageded not only into financial goals is the trend. Through philanthropic actions, internal or external mobilisation actions, by supporting charitable events, the company seeks to show its good will to solve the social and environmental challenges of our time.
Has CSR a direct impact on sales?
It is not black-and-white in the corporate world and the notions of engagement and philanthropy could even sometimes slow down the ecological and social transition and further degrade trust in business. That’s what a study recently published in the Journal of Marketing shows. Let’s deep dive into it.
How to know it
Researchers in that paper measured the rate of companies’ CSR actions affecting their sales (and therefore their public image). To do this, they analyzed more than 80 engagement initiatives from over 55 consumer brands, and examined sales data for these brands. The goal was to see if a particular initiative improved the company’s image and sales.
As we cannot consider all the actions having the same effect, researchers divided the initiatives into 3 categories: “correction” actions (reducing one’s carbon footprint at the source, for example), compensation actions (financing an ecosystem restoration program, for example) and engagement and philanthropy actions (donating to associations, engaging employees in general interest actions that are not directly related to the company’s activities).
What have been found
The data shows that while the correction and compensation actions have a positive impact on the company’s sales, this is not the case for engagement and philantrophy actions, which on the contrary tend to reduce sales. We can therefore see that when the company acts on its own operations, on its core business, when it commits to reducing its negative impacts, its image improves and its sales are positively affected. Conversely, when the company gives the impression that it is hiding behind a rhetoric of commitment and philanthropy, its sales drop by up to 3.5% one year after the implementation of these actions.
In other words : the commitment must first and foremost be sincere and constitute a concrete effort by the company in its activities to have a positive impact.
Examples of real actions
The list is not exhaustive of course, but can help to build an understanding of what can be possibly done in the corporate word to pursue CSR approach.
Bouygues
A large French construction group launched a low-carbon strategy in 2020 (2030 target), and have already announced a 30% reduction for Scope 1 and 2 (direct and indirect emissions linked to energy consumption) and 30% for Scope 3a (other indirect upstream emissions, such as the materials used by suppliers)
Danone
We all know its products but do we all know its impact? The group reduced by 38,1 % in 2020 its reduction in absolute value of CO2 emissions on scopes 1 and 2 (in tons of CO2). Speaking about circular economy, the group implies reusable, recyclable or compostable packaging in 81% of cases in 2020
Chiesi
Italy-based international pharmaceutical group, BCorp certified has all her italian sites powered by 100% renewable energy in 2020 and all the affiliates are aiming to reach the same target soon.
IKEA
IKEA starts with their supply chain, where the Swedish furniture-maker has sourced close to 50 per cent of its wood from sustainable foresters and 100 per cent of its cotton from farms that meet the Better Cotton standards, which mandate reduced user of water, energy and chemical fertilisers and pesticides.
