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6 key benefits to businessof managing your ‘Social Impact’

IMPORTANCE

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THE IMPORTANCE OF MANAGING YOUR SOCIAL IMPACT

So, what is ‘Social Impact’ or Corporate Social Responsibility (CSR) as it used to be more widely known? Isn’t that just donating a few pounds to a local charity every Christmas or sponsoring staff to do a fun run from time to time?

Well actually, no.‘Social Impact’ or CSR (whichever you prefer) is a fundamental consideration for businesses that affects every aspect of what they do.

With the growth of social media and viral marketing, brand perception is becoming increasingly harder to control as information about your company can be distributed faster and more widely than ever before, be it positive or negative. For example, consider if a customer has a bad experience using your company - it takes just a few minutes for a rant on your facebook or Twitter page to go viral, especially if you delay in responding or are seen to be at fault. Where a larger scale issue occurs the effects can be catastrophic for business. Just consider the recent VolksWagen scandal over circumvented emissions tests or the Sports Direct case regarding the treatment and payment of its workers as examples of what we mean.

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WHAT EXACTLY IS CSR/SOCIAL IMPACT?

In simple terms, Corporate Social Responsibility is when a business acts ethically and is socially responsible and goes beyond its economic and legal obligations for the good of others, not just its financial stakeholders but society as a whole.

There are the different types of CSR:

• Environmental – considering the environmental impact your company has such as waste management, energy usage etc.

• Social/Community based – working alongside the local community to make improvements e.g. schools, local councils, etc. For example - Tesco’s vouchers for clubs and schools scheme which has been very successful since its initial launch over 25 years ago and ASDA’s community support programme that fundraises for local charities and organisations and provides staff with the opportunity to volunteer in the community.

• HR – looking after the wellbeing of staff. Google is probably one of the most well known employers to provide benefits to staff including subsidised canteens, healthcare packages, extremely flexible working system, etc.

• Philanthropy – charitable support for example. Over recent years Innocent have promoted their ‘Big Knit’ campaign to support worthwhile causes such as Age UK.

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ReputationThe most obvious benefit is surely an improved reputation and positive brand perception. By being known to be an ethical and responsible company your company image will undoubtedly improve amongst customers, employees, shareholders and investors and competitors. This alone can lead to several further benefits including…

Improved sales and customer retention With the rapid growth of social media, consumers are becoming increasingly aware of their chosen suppliers’ activities, policies and practices and it appears that a company’s level of social responsibility plays an increasingly important role in consumer purchasing decisions.

1/3 of consumers (33%) are now choosing to buy from brands they believe are doing social or environmental good. – unilever international study 2016

55% of global consumers willing to pay extra for products and services from companies committed to positive social and environmental impact up 10% from 2011 – Nielsen 2014 Doing Well by Doing Good

Good CSR helps to keep customers satisfied with a brand and a satisfied customer is more likely to endorse that brand, encouraging positive word of mouth and sales growth.

BENEFITS OF CSR

CSR has obvious benefits to its stakeholders e.g. employees, charities and local community, but what benefits does an active CSR policy deliver to the business?

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Interesting and positive PR CSR can help a company generate ongoing positive PR that is often of significant interest to its target customers. When this covers activities such as charitable support and aiding the local community, companies often find distribution of this PR also increases as local press are encouraged to run the story too, increasing awareness even further.

On the flip side, when a company is found to be acting unethically the PR implications can be devastating and often far reaching.

“Consumers increasingly don’t accept unethical business practices or organisations who act irresponsibly. Advances in social media (giving everyone a voice) mean that negative or destructive practices quickly fuel conversations online. Organisations are accountable for their actions like never before.”

Source: SimplyCSR

Improved employee motivation By ‘investing’ in your staff whether it be through training, improved facilities, health care plans, flexible working, etc you are likely to improve motivation and in turn, productivity. Motivated staff are also more likely to be vocal advocates of your company, endorsing it to their friends, family and your customers which can help with recruitment, sales and general company perception. Plus, having happy, motivated staff leads to a more pleasant office environment which is better for everyone involved.

Aside from providing direct benefits to your employees it’s also proven that staff appreciate their employer’s social responsibility efforts and this also affects motivation and satisfaction.

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93% of employees surveyed want to work for a company that cares about them as an individual- 2016 Cone Communications Employee Engagement Study

51% won’t work for a company that doesn’t have strong social and environmental commitments- 2016 Cone Communications Employee Engagement Study

Employee advocacy increases with societal issue engagement. 82% of employees at a company involved in a broader societal cause would recommend company as an employer compared to 57% of employees at a company not involved. – Edelman Trust Barometer 2016

Cost reductions These can come in many forms and depend largely on the nature of the business and the company’s CSR objectives but they can include the following:

Energy savings through the use of more efficient equipment, introduction of recycling and waste reduction policies,etc.

Staff training and recruitment costs – motivated and happy staff are less likely to leave increasing your retention, improving productivity and and reducing recruitment and training costs. Plus, with an enviable reputation as an ‘employer of choice’ you are more likely to recruit higher quality candidates in the first place.

Risk management – more ethical practices lead to less risk and liability.

Advertising costs - as word of mouth increases and your reputation expands, traditional advertising costs may be reduced.

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Differentiating yourself from competitors In highly competitive markets such as ours it’s important to stand out from the crowd and for the right reasons. Having an enviable reputation in the market for CSR and positive social impact is a great way to differentiate yourself from the competition and can really help to position you in the market.

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MOST IMPORTANTLY OF ALL...

Whilst CSR has a vast array of business benefits, most importantly of all it helps local communities, the environment, employees and local charities. After all that’s the whole point in doing it in the first place.

BUT IT’S NOT ALL POSITIVE!

It’s important to provide a balanced argument for CSR and therefore whilst CSR has many pros it’s also important to discuss the potential cons.

CSR costs time and money, plain and simple. Not all businesses are willing and/or able to dedicate time and resources to managing a CSR policy, especially smaller ones. Therefore, CSR isn’t necessarily easy for everyone to implement fully.

Not all CSR is straightforward. After all, it’s not just about running charity events and recycling your waste. CSR is far more wide reaching and not all aspects are easy to implement. This comes down to the individual company’s goals and CSR plans but achieving ‘carbon neutral’ status or obtaining an ISO accreditation for example is far from easy.

CSR is about going beyond legal and economic obligations for the ‘greater good’ but it’s important to remember that first and foremost you are running a profitable business and so it’s

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important to maintain a financial balance. Whilst being socially responsible is admirable, there are other stakeholders that also need to be satisfied e.g. shareholders and at the end of the day, motivated employees are only worthwhile if they have a job to go to.

There are always sceptics of course and even the most ethical companies can come up against criticism. Be prepared to prove any claims that you make.

Implementing a CSR policy doesn’t mean you publish a policy, put a few processes in place, make a few charitable donations and then forget all about it. The fundamental idea behind CSR is that the ‘policy’ and the ‘planned activities and goals’ are monitored and updated regularly to track effectiveness and progress. It’s a long term commitment – something that needs to be reported on and tracked to ensure it is current and effective.

DOES IT WORK IN PRACTICE?

Yes, and that’s why uptake of CSR is increasing across many industries. In recent years the number of businesses making a huge success from adopting a highly ethical stance has increased, many of them are also very well known.

“64% of CEOs Are Increasing Investment in Corporate Social Responsibility in 2016”Source: Huffingtonpost.com

One of the first was arguably The Body Shop, known for its range of ethical cosmetics and beauty products that came from sustainable fair trade sources, weren’t tested on animals and were completely natural. More recently, companies like Innocent smoothies have come to the forefront with an enviable market reputation for its use of natural ingredients in its drinks and its charitable support. There are many more that CSR has worked for either as a fundamental ethos of their business, or as an active policy to be adhered to.

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A key factor all successful ‘ethical’ companies have in common is their coherent and consistent marketing strategies. There isn’t much point in focusing your business and its activities on positive social impact if you don’t tell everyone about it. That’s why successful CSR policies must be aligned to a comprehensive communications and marketing strategy that promotes and informs of the company’s activities, be that charitable donations, new energy reducing initiatives or community support projects - shout about them to everyone that matters!

EMPLOYEE BENEFITS

For example, over recent years Entanet has invested heavily in staff benefits and motivation to become an ‘employer of choice’. All staff receive a subsidised health care package, free broadband and VoIP at home, discounted gym membership, access to a pension scheme and childcare voucher scheme and receive an annual performance based bonus.

They also receive regular performance reviews where any knowledge and training gaps are identified and addressed appropriately. Entanet adopts a ‘promote from within’ policy which means wherever possible or appropriate employees are encouraged to fulfil their full potential and are promoted from within the business, often across departments. They are also encouraged to share their feedback through company wide staff surveys, quarterly company performance updates and open door policies. In 2016 we also launched a new apprenticeship scheme, working alongside our local college.

CHARITABLE ACTIVITIES

Entanet has a long history of charitable support and that continues with a number of usually staff led charitable activities including this year’s ‘Entanet staff Tough Mudder challenge’ which will aim to raise over £6,000 for Sands. To find out more about our ongoing charitable activities see www.enta.net. In 2016 Entanet

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raised over £2500 to various charities including the Birmingham Children’s Hospital and Birmingham Women’s Hospital.

ENVIRONMENTAL

We also try to help the environment wherever possible with paperless billing options for customers and a focus on using online systems and processes wherever possible. We even send e-cards at Christmas as an alternative to physical cards and make a small donation to charity, which has in the past been the Woodlands Trust.

IS CSR FOR YOU?

Hopefully. After reading this you might have some ideas of how you can start to become more ‘socially aware’ and implement some of the CSR activities mentioned above. However, if you’re unable to implement CSR it doesn’t mean you shouldn’t be aware of and interested in the CSR policies and activities of your suppliers. How do your current suppliers affect their local communities? How do they support and train their staff and how can those staff members use that knowledge to help you and your business? Do they support local charities and organisations? If this is something you are interested in, then ask them about it.

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