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Why Corporate Social Responsibility works for companies and the community
July 25, 2019
Entrepreneurs and entrepreneurial companies as well as professional organizations in a free market environment are motivated to solve problems. They do this by seeking to improve products, services and processes that are attractive to customers or employees or business performance or any combination. Interestingly, of the present Fortune 500 companies, only 58 were on the list in 1955. That’s because of innovation and “creative disruption” that continually rejuvenates the economy.
Today, one innovative goal, now known as Corporate Social Responsibility (CSR), is to help people and the community accomplish their objectives consistent with the values important to attracting customers, or attracting employees of talent, or improving the community so more people of contribution will want to come and stay for their own reasons. These can vary greatly.
As the expectation continues to grow among employees of talent and customers that businesses need to be a force for social good, more and more companies are empowering their workforce to support causes that are meaningful to them, or their customers, or their families, or the community at large. Thus, among the largest 250 companies in the world, 92% produced a CSR report in 2015, informing shareholders and the public about the firm’s activities. That’s up from 64% having such a report in 2005. Today, Fortune Global 500 firms spend around $20 billion a year on CSR activities.
Likewise, many companies offer opportunities for volunteerism to improve the community in recognition that all profits in some way come from some aspect of the community. Of course, nonprofit organizations are often the heroes of the business community as they take on some of society’s toughest problems that are best solvable by nonprofit mission-driven organizations rather than by profit-driven organizations. For this to happen, many for-profit organizations find it in their self-interest to help nonprofits with some consistent funding support as part of their CSR program.
Companies that get it right with CSR are positioned better than their competitors to attract and retain top talent or build preference for their brand or service while making a real impact for the greater good in their communities and beyond.
CEOs are also increasingly finding value in meeting with their peers for idea exchange on this complex subject. Today most organizations of stature or growth have some kind of participation in CSR. The task is to continually develop such programs that organizations need for efficiency while simultaneously recognizing the reputational or competitive needs of the business and the many constituencies of the community.
As always leadership matters.
Satell Institute Growth Continues
Membership at SI continues to grow with great companies and private foundations choosing to support Corporate Social Responsibility (CSR) initiatives of their choice.
This week we welcome as a new Member, supporting its own nonprofit, a division of long-time Member UGI, deeply grounded in community CSR. This company, UGI Utilities Inc., is a natural gas and electric utility serving more than 700,000 customers in 46 counties in Pennsylvania and Maryland. Delivering reliable, safe and affordable energy, their mission is to be the preeminent energy distribution company, providing a superior range best-in-class safety, operations, products and services.
The UGI Values statement includes: “We all have a responsibility to demonstrate our values in our day-to-day work inside and outside the Company.” They have chosen to support Penn State Scranton, now welcomed as a Nonprofit Affiliate of the Institute.