What Is Corporate Social Responsibility?
As the Black Lives Matter, #MeToo, and climate justice movements continue to gain momentum, businesses are forced to address their practices and their values. Does a company’s leadership reflect who they serve when it comes to inclusion? Do marginalized communities feel welcome in a particular shop or space? Are global corporations actively adding to the climate crisis, instead of trying to mitigate it?
This is the latest wave of corporate social responsibility (CSR), which asks companies to align ethics with outcomes. In the words of Soapbox Project Founder & former Project Lead at Accenture, Nivi Achanta, “Corporate social responsibility describes businesses’ efforts to make a positive impact on their communities and the world.”
These efforts can look vastly different. Some corporate social initiatives provide one-time donations, while others encourage employees to volunteer. Increasingly, more businesses are focused on long-term impact, like reducing waste throughout the supply chain, shifting to open hiring practices, and committing a portion of every sale to an aligned organization, like 1% for the Planet. The most effective CSR strategies take a comprehensive approach that considers sustainability, ethics, values, and stakeholders.
“As consumers, we have the power to demand accountability to ensure that our dollars align with a brand’s efforts.”
As consumers, we have the power to demand accountability to ensure that our dollars align with a brand’s efforts. Rachel Barton, a managing director at Accenture Strategy, framed it this way when speaking with Forbes: “Why settle for anything less than a brand that has integrity, respects the environment that it operates in, treats its people fairly and respects the world that they live in?”
We shouldn’t.
Why Is CSR Important?
To be sure, our individual actions matter. But what we can do at home or in the workplace can only add up to so much, whereas we can advocate for change on a large scale from businesses with a global reach.
After all, companies can only be as financially successful (or in this case, ethically or environmentally harmful) as the number of consumers who support them. And they’re aware of it. Kate Mikesell, Hilton Hotels’ VP of Global Corporate Responsibility, says, “We know the success of our business is linked to our ability to operate and grow sustainably.”
“Companies can only be as financially successful (or in this case, ethically or environmentally harmful) as the number of consumers who support them.”
Why not raise our voices and ask for better?
Here’s a perfect example of how we can do so: According to the NRDC, “The top 15 U.S. food and beverage companies generate nearly 630 million metric tons of greenhouse gases every year.” That’s more greenhouse gases than all of Australia. If organizations are responsible for damaging outcomes, then they should be part of a sustainable solution. In this case, we can question what those companies are doing to limit their emissions or offset them altogether.
And our voices are being heard: After facing mounting pressure from consumers in 2018-2019, McDonalds in the UK switched to paper straws instead of single-use plastic. Dick’s Sporting Goods had its best quarterly sales in years after announcing it’d remove firearms from stores following the Parkland tragedy. Products recently marketed as “sustainable” grew nearly six times faster than their peers. It’s good business to do…good business.
Is Corporate Responsibility Greenwashing?
Cutting through greenwashing and false claims—and you will have to really cut through them—is key to understanding a company’s commitment to CSR.
Take a look at a brand’s website and social media. Companies will openly publish their sustainable and ethical standards, like being named a “Certified B Corp” or offering “certified organic” products. These certifications are conducted by third parties who have intensive vetting processes and require regular re-certifications. (But keep in mind that credentials are expensive, so not all eco-friendly brands can tout a sustainable label. Conversely, not all small businesses are necessarily sustainable, either.)
“Search for specific verbiage like a company’s sustainability goals or efforts to date.”
Dig deeper into the language brands use. Flowery language like, “We deliver high-quality products with respect for people and the planet” without explicit metrics can be a red flag. (And seeing nothing at all is a major red flag, too!) Instead, search for specific verbiage like a company’s sustainability goals or efforts to date. Patagonia, Whimsy + Row, and East Fork Pottery have excellent overviews of their impact, all of which are easily accessible online.
For global companies with massive footprints like Hilton Hotels, there are entire departments dedicated to corporate responsibility. Mikesell works with her team on Travel with Purpose, the brand’s own CSR goals in alignment with the United Nations’ Sustainable Development Goals.
Hilton’s strategy aims to cut its environmental footprint in half and double its social impact by 2030, and each year, the brand releases a report to track these targets. Similarly, more than 90 percent of the S&P 500 index companies now publish annual sustainability reports, so this can be a useful tool to help cut through the noise. “By reviewing a company’s annual report, you can get a better sense of the ‘how’ [they’ll tangibly reach their goals],” shares Mikesell.
“Do your values align with its owners’? Does the brand focus on equity and inclusion, rather than just ‘diversity’?”
Examine a company’s leadership, too. Ask yourself: Does it represent the community the business serves? If it’s publicly traded, do your values align with its owners’? Does the brand focus on equity and inclusion, rather than just “diversity”? Are executives saying one thing but doing another? (For example, some recent corporations spoke out against Georgia’s new voting laws but are funding the same lawmakers who enacted them.)
If you aren’t finding the answers you need on the brand’s own website or social media, Google and cross-reference its online presence. See what press coverage the company has recently gotten or if it’s being featured by a legitimate platform. If you’re curious about its internal culture, look up Glassdoor reviews.
Still no luck, or are a brand’s commitments not up to par? We can speak up! Reach out and ask for more transparency. Raise specific questions. Remind them that nearly 70 percent of consumers consider a company’s “purpose” before making a purchase, and how important sustainability and ethics are to you.
“When capitalism is king and profit takes priority, we as consumers have the chance to vote for the world we want with our dollars.”
Businesses have long been trusted to “do the right thing.” But when capitalism is king and profit takes priority, we as consumers have the chance to vote for the world we want with our dollars. And it’s on all of us to fight for a healthier, happier, and more just future.
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