October 15, 2018

The ROI of CSR: Three Key Areas Where CSR Impacts Your Bottom Line

The ROI of CSR: Three Key Areas Where CSR Impacts Your Bottom Line

Corporate Social Responsibility (CSR) is the commitment a business makes to operate ethically and to help address social issues important to its stakeholders. The most impactful CSR strategies are those that authentically reflect the business’ purpose, mission and values.

How should a company measure the impact and the return on investment (ROI) in CSR? While that largely depends on the company’s objectives and intended outcomes, there are three key areas that businesses of all sizes should consistently realize value from their CSR initiatives.

Brand Reputation
Consumers today don’t just want to buy a brand, they want to buy into a brand. They want to feel good about where they choose to spend their money. They want to understand what a particular company cares about and how it behaves. When CSR initiatives are an authentic reflection of a company’s core beliefs and principles, and individuals feel like those align with their own, they find it easier to trust a brand. Ultimately as trust builds, so does customer loyalty. Loyal customers are more likely to recommend and advocate for a brand and are usually more willing to forgive companies when they misstep. CSR can be a powerful component of the story told about a company and what it stands for, beyond making a profit.

Employee Engagement
High turnover is costly to all businesses, but finding the right employees and keeping them engaged is not easy. Just like your customers, your employees want to feel good about where they work and what they are doing. They too are looking for values alignment and ways they can integrate their passions and strengths to give back to others with the skills they learn on the job. CSR plays an important role in not only attracting employees who are values aligned but also keeping them engaged with meaningful opportunities to fulfill their interest in giving back to others.

Sometimes doing the right thing can cost more, particularly in the near term. However, many companies see value in implementing sustainable initiatives over time. From creating a healthier supply chain to finding ways to reduce waste, companies today are investing in solutions that impact their community and their bottom line. Even companies who do not manufacture a product can find ways to increase sustainability through procurement policies (i.e., buying green, local or from minority-owned businesses), purchasing carbon offsets, establishing telecommuting options, and encouraging employees to form a "green" team to identify and implement environmentally friendly solutions in their office.

Related Industry

Nonprofit & Social Sector