While we should all be striving for more socially responsible practice, in today’s economic climate, the bottom line is always the main priority. Regardless of scale or industry, good ethics don’t visibly boost profits, and the corporate benefits of this type of approach are harder to see.
Increasingly, however, brand image is becoming vital. The rise of SEO demonstrates the power of reputation within an increasingly digital-centric marketplace. Marketing, as a result, is a diverse and increasingly social media-based endeavor.
Engaging in socially responsible business is an increasingly effective strategy in this digital climate, and adopting a good approach is a win-win for businesses and communities. So how do existing companies go about social responsibility?
Working with specific communities
As opposed to picking a cause at random, the most effective ethical and socially responsible practice begins at home. A good approach, and one that reaps the most rewards, is to work within a community that is relevant to the interests of the business.
Microsoft offers a clear example of this approach. As well as raising over $1 billion dollars a year for various charities and non-profit organisations, the tech firm also provides local education programs in disadvantaged areas.
Through this program, Microsoft encourages its employees to volunteer at local schools, where they teach students in computer science. Through this initiative, the company aims to help young students, while also tackling the shortage of IT professionals in the US.
A focus on conservation is also beneficial, and promoting greater sustainability is a worthy cause. YOOX, an international fashion retailer, is one such example, having launched their Yoox Loves the Reef initiative earlier this year.
Partnering with the Great Barrier Reef Foundation and the Australian brand We Are Handsome, this initiative promotes conservation of the Great Barrier Reef, which has declined by 50% between 1985 and 2012, in part due to climate change.
Through this focus on conservation, YOOX has helped raise awareness and money, while also promoting more sustainable practice within the fashion industry.
While both of these approaches have clear ethical and community advantages, what are the corporate benefits of this type of socially responsible business?
Changing the narrative
For many companies, engaging in socially responsible business provides a chance to re-address previous perceptions, with a devotion to good ethics demonstrating a dedication to positive change.
Starbucks, who have previously been criticized for struggling to reduce their environmental impact, have successfully changed their image in the public eye, by committing to greener practice, including introducing recyclable cups.
This dedication to social responsibility has allowed Starbucks to change the narrative, giving them a better, more ethical public image.
While the dedication of companies to sustainable and responsible business is good for brand image, how does this impact upon brand loyalty? Research from Nielsen suggests that the benefits are very real.
Speaking to 30,000 global consumers, Nielsen found 55% will pay extra for products and services from companies committed to positive social and environmental business. Additionally, 52% made at least one purchase from a socially responsible company in the past six months.
The benefits of socially responsible business extend beyond good will and philanthropy, and in a reputation-based marketplace, good ethics have clear, tangible corporate benefits too.