Remote operations
Marc Prempain
7 May 2024
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It's not just about checking the box on corporate social responsibility. It's about hitting our bottom line.
Corporate Social Impact refers to the effect on people and communities that happens because of an action, inaction, policy, program, or project of the company. Companies are concerned about social impact not only with the view to adopt ethical business practices, but also to create a competitive advantage.
Volunteering offers significant benefits towards a social cause, people in need, and the community as a whole. Community service improves social interactions amongst the members and generates a feeling of inclusiveness as the community works together to solve common problems.
Corporate volunteer time off policies (VTOs) are philanthropic programs that are aimed at supporting programs that enhance and promote local impact. These programs aim to support the community and allow its employees to participate in this effort. Participation in volunteer programs benefits not only those being helped, but also enhances the mental health of employees participating in the programs.
Volunteer work helps improve physical and mental wellbeing. Devoting oneself to a cause and helping others could have a profound impact on one’s psychological wellbeing. It helps fight social isolation, depression and reduces stress. Research has shown that those who volunteer have lower mortality rates than those who do not volunteer.
Volunteering is a great way to expand your network and meet new people. When volunteering with a non-governmental organization (NGO) or in an office environment, volunteers are required to interact with people from different walks of life and with various positions, ranging from the Chairman to the administrative assistant. Students and those looking at career changes can volunteer in specific organizations to understand the challenges, processes, and nuances of an industry before making the shift. Volunteering provides people with the opportunity to be exposed to different areas; this could provide the competitive edge that is required for their long-term career advancement.
Moreover, corporate volunteering helps companies stay connected to the communities within which they are established. It also showcases the organization’s work to the consumers and efficiently communicates their social impact objectives.
Companies that are interested in setting up volunteer programs can establish corporate programs with non-governmental organizations (NGOs), schools, and universities. Companies can set up volunteer time off programs and encourage their employees to volunteer.
Additionally, today’s technological tools make it easy for individuals to volunteer online and collaborate with others. For example, the United Nations Volunteer Program has set up volunteer opportunities that can be done completely online, such as helping local NGOs, translating documents, or teaching a language to underprivileged children.
Businesses have normally been led by the bottom-line approach, wherein they focus on increasing the profits for the shareholders of the company. Social responsibility on the other hand mandates companies to adopt the triple bottom line approach. Businesses need to measure their social and environmental performance in addition to the profits. Companies are no longer responsible just to their shareholders but are now also responsible to their stakeholders. The triple bottom line approach dictates that companies incorporate profit, people, and the planet into their decision-making process.
Corporate Social Responsibility can be defined as actions that appear to further some social good, beyond the interest of the firm and that which is required by law. CSR policies require companies to go beyond merely complying with the law to creating a positive social impact within the society (including the environment, employees, community, etc.).
Corporate social responsibility programs can be broadly broken down into 4 major categories: social, governance, environment, and economic responsibility.
Social
Social responsibility dictates that businesses are run in a fair and ethical manner within the communities where they operate. Businesses must incorporate policies and initiatives to adopt the best business practices on issues including human rights, employee relations, diversity, and product safety.
Additionally, companies can also play an active role in improving society through philanthropic activities such as the 1% pledge. Organizations may adopt cause-based marketing techniques wherein they pledge to donate a certain percentage of the profits earned to support a socially impactful cause.
Environment
Environmental programs are based on reducing the environmental footprint of the corporation’s operations and maximizing its sustainability. It would involve a variety of different measures such as, increasing reliance on renewable, clean and sustainable energy sources, reducing greenhouse gas emissions, creating green supply chains, and implementing initiatives to offset the impact on the environment.
Governance
Corporate governance is defined as the framework of rules by which the board of directors remains accountable to their stakeholders. Businesses must incorporate strong corporate governance frameworks to ensure accountability to their stakeholders.
Economic responsibility
Companies also have an economic responsibility to back their CSR activities while making financial decisions. Moreover, a company first needs to be economically profitable to create value for its employees and society.
Sustainability encompasses the 3 areas of a company’s operations, environmental, economic, and social. These 3 main areas are referred to as the 3 pillars of sustainability.
The environmental pillar is associated with reducing the business’s environmental footprint. The environmental sustainability initiatives that companies have adopted have been centered around reducing pollution, greenhouse gasses, and the usage of non-renewable resources. Businesses are also adopting environmentally friendly packaging materials.
In cases where companies have a clear environmental impact, they can work towards reducing the negative impact through the adoption of sustainable strategies, modernization of equipment, and digitization.
The economic sustainability pillar highlights the importance of developing a profitable business. Businesses must be profitable in order to maintain a long-term sustainable impact. Corporate governance frameworks help companies gain a competitive advantage over other firms and can benefit from a better business reputation.
The social sustainability pillar focuses on stakeholder management and community engagement. Companies that seek to increase their social impact need to ensure that products are being sourced in a fair and responsible manner. Businesses need to pay fair wages and ensure that there is no child labor being employed within their processes. Social sustainability is also associated with equity, diversity, and social integration within the business.
Sustainability helps align the organizational values towards combating global challenges. Moreover, companies that have a high Environmental, Social, and Governance (ESG) rating tend to have a lower cost of borrowing. Becoming a socially impactful company sustainable company would improve efficiency, further brand value, attract top talent and strengthen stakeholder management. Sustainability measures would help improve financial performance while also generating public goodwill.
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