How Corporate Social Responsibility Improves Your Bottom Line
How Corporate Social Responsibility Improves Your Bottom Line By Carson Leith
“Corporate social responsibility.”
The term might seem like an oxymoron, given that corporations seem to focus on pleasing investors and garnering profits over any sort of social responsibility.
But all of that is changing. And it’s not just because corporations are suddenly conscientious about their social responsibilities; it’s because it’s actually good for their bottom line.
How is Corporate Social Responsibility (CSR) good for the bottom line? Let’s dig deeper and find out.
CSR is all about the “triple bottom line.” The triple bottom line, also known as ”TBL,” or “The three Ps”, is a concept introduced by John Elkington (a world renowned authority on corporate responsibility) that reveals how a company is doing socially, environmentally, and financially. This metric doesn’t just measure profit; it takes into account the whole picture: Profit, Planet and People.
People: “People” are the driving force behind any successful business: they represent the labor that makes things happen day to day. When businesses write the triple bottom line into business plans, it’s because they want all stakeholders to benefit without short-changing anyone. This category is all about how you’re treating your employees and your customers.
Planet: “Planet” is all about business practices that are environmentally sustainable – maximizing benefits to the planet and removing detriments as much is possible. But this doesn’t mean you have to go searching around the world to try and make a green impact. Just start right where you are. Did you know that since 2009, Disneyland has been running its trains on biodiesel made from the recycled in-house cooking oil? They reuse the oil from cooking french fries and other foods at the Resort. This alone saves them 200,000 gallons of petroleum diesel each year. Look around you. Start at the office and see where you can make a difference in daily operations. And then tell the world a story about it.
Profit: “Profit” is about making as much net income as possible, but the triple bottom line takes it one step further. “Profit,” by the TBL definition, isn’t just how much money the individual company makes; rather, it also includes the economic value created by the company for the financial benefit of other companies. It’s more of a “welfare for all” mindset, as opposed to a “winner takes all” mindset.
Keeping all of this in mind…
How does corporate responsibility improve your company’s bottom line?
1. CSR improves your reputation and thus your customer base. Consumers are increasingly paying attention to where they buy their goods from. If you’re socially responsible, and you use that as a selling point, you’ll see increased profits.
2. CSR gives you happier, more productive employees. After doing research on how CSR affects businesses, Devin Thorpe from Forbes noted that “While each company [he] interviewed had varying responses, 86% believe that they have happier employees and 76% believe they end up with better employees.”
3. It helps you stay in business. Let’s face it: If there’s no planet to garner resources from, none of us are going to be here for very long – and that means that your corporation is ultimately going to disappear. While honoring the triple bottom line takes more careful forethought and planning than traditional “winner take all” paradigms do, the ultimate result is that when you honor the triple bottom line, everybody – including you – wins.
Rob Feen from Sustainable Business Toolkit wisely points out that CSR is not merely a marketing ploy for big business to be socially acceptable: ”There are tangible benefits to be had by all,” he says, “The key is not to treat CSR as an ‘initiative’, but to simply view it as the way you do business.”
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