Corporate Social Responsibility
Why Social Responsibility is important to businesses:
In the last 30 yrs companies have been increasing their focus on CSR, such as becoming more sustainable, protecting the environment or declaring support for movements such as Black Lives Matter.
Although on the surface CSR often seems a generous act of firms reducing their profits in support of the greatest social issues, there are many benefits to CSR for companies that can do good in the world, while increasing profits. Socially responsible companies are often more attractive to consumers and share holders which positively affects firms bottom line.
Embracing socially responsible policies helps attract and retain customers, which is essential to a company’s long-term success. Furthermore, many individuals are willing to pay a premium for goods, knowing that part of the profits will be put towards social causes important to them. Likewise, companies can witness increased foot traffic if they support the local community. For example, banks that dispense loans to low-income households often see an uptick in business as a direct result.
Socially responsible companies tend to attract employees who are eager to make a difference in the world. With large companies, collective employee efforts can achieve great results, which increases workplace morale and boosts productivity. The bottom-line is, workers are more motivated to work if it’s for a good cause.
Community-oriented companies often enjoy a leg up on their competition, as well, thanks to superior brand imaging. For example, Tesla Inc. (TSLA) CEO Elon Musk has attracted environmentally conscious consumers, with his line of electric-powered cars and green automotive products. Tesla is now the world’s most valuable car company in the world, as a result of their innovation and sustainable goals, which has added value to it’s products, as mentioned before, people are willing to pay a premium for Tesla cars, knowing they are contributing to the fight against climate change.
