When it comes to corporate social responsibility and creating ‘shared value’, companies are still not taking advantage of their greatest asset: their employees.
The potential for companies to impact society for good seems to be increasing at an exponential pace. There are a number reasons why this is happening:
Reason 1: The growing popularity of Corporate Social Responsibility
A growing number of companies are seeing and discussing the numerous business benefits of CSR. Despite the confusion sometimes espoused by academics and the media, CSR is being embraced as a profitable and competitive strategy.
Reason 2: Customers are beginning to demand more from the companies that supply their goods and services.
In the words of Carol Cone, Edelman’s recent research revealed that “It is no longer enough to slap a ribbon on a product. Americans seek deeper involvement in social issues and expect brands and companies to provide various means of engagement…we call this the rise of the ‘citizen consumer.’ (Read more here.)
Reason 3: Sustainability is THE issue we are all facing, whether as governments, businesses, societies or individuals.
“While many organizations falsely subscribe to the belief that business sustainability is only for larger organizations, there is the recognition that risk doesn’t discriminate. To unprepared organizations, the business risks of carbon, water, and climate change disclosure takes many forms:
- Potential increase in operating cost
- Potential increase in supply costs
- Potential disruptions to supply or loss of supplier relationships
- Potential loss of revenue or market share
- Potential to business reputation
- Potential inability to secure investment dollars or capital
Julie also notes, “According to Ernst & Young’s 2010 Business Risk Report, corporate social responsibility and the need for social acceptance both appeared on the top ten risks facing businesses.”
Beyond these (and many others not listed here) compelling reasons for doing business in a way that generates value for the company and the communities in which they operate, there is still the issue of how this is accomplished.
What Are We Missing?
While companies are beginning to focus on greening their supply chains, reducing the carbon footprint of their operations, ethically sourcing resources, as well as paying more attention to healthy and diverse workplaces, comparatively little is being done to leverage their greatest assets for social benefits: the employees.
Employees represent the strongest and broadest link between most corporations and their stakeholders. Understanding the value and impact of social capital may be a necessary precursor to embracing this fact, yet it seems fairly obvious that a company with over 20,000 employees has an immediate and relational connection with almost 2 million people around the world. This is especially pertinent considering 78% of consumers trust peer recommendations, while only 14% of a company’s customers (and stakeholders) trust advertisements. (More about trust and CSR here.)
In fact, according to the 2010 publication of Deloitte’s Volunteer IMPACT Survey in the USA “Corporate America is giving workplace volunteerism a strong vote of confidence as a means to make a significant, long-term difference in their communities.” Apparently “more than eight in 10 companies (84 percent) believe that volunteerism can help nonprofits accomplish long-term social goals, and are increasingly offering skills-based volunteer opportunities to employees.”