For Patagonia, corporate social responsibility is built into its DNA. The outdoor clothing company focuses on saving the very planet its customers are out exploring.
The company donates 1% of its sales to grassroots environmental organizations. It leads the clothing industry in the use of recycled nylon and polyester fabrics, and even educates customers to repair clothes instead of throwing them away. Patagonia also launched an online thrift store where it resells used clothing that customers trade in, which further reduces waste.
The more the retailer doubles down on environmental activism, the more successful it becomes. For example, in 2016, when Patagonia announced plans to donate its Black Friday revenue, it not only raised $10 million for environmental groups, it gained 24,000 new customers that day. In the past decade, the company has quadrupled its revenue.
A strong commitment to social responsibility pays off big time for Patagonia—but times are changing. The COVID-19 pandemic has left millions unemployed and organizations scrambling to cut costs. In such volatile times, we’re left wondering: is social responsibility still important?
Corporate social responsibility explained
The World Business Council for Sustainable Development defines corporate social responsibility as a commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of its employees, their families, the local community and society as a whole.
It’s managing the social, environmental, and economic effects of a company’s operations responsibly. Businesses can benefit their communities through programs, philanthropy, and volunteer efforts.
Social responsibility benefits
Social responsibility initiatives have always been important, providing companies many benefits, including:
- Enhancing a brand’s image
- Increasing sales and improving customer loyalty
- Reducing operational costs
- Attracting and retaining top talent
In fact, a survey found that 63% of Americans want businesses to take the lead to drive social and environmental change, and 78% believe it’s important for companies to stand up for important social justice issues, according to a Forbes article.
Of those surveyed, 87% would purchase a product because the company stood up for or advocated for an issue they care about, while 76% would refuse to buy the company’s products or services if it supports an issue contrary to their beliefs.
A company’s social responsibility strategy not only attracts consumers but also employees. A survey by the nonprofit Apparo found that organizations that encouraged employees to volunteer during paid business hours are more motivated and energized because it allows them to use their skills for good causes.
In particular, Millennials and Gen Zers, want to work for companies that take a stand on social issues. A Glassdoor survey found that 75% of workers between 18 to 34 years old expect their employers to take a stand on issues, such as immigration, equal rights, and climate change.
The COVID-19 disruption
While social responsibility is important, the pandemic has completely upended the business world. In the most recent reports, 11.1% of working-age people are unemployed, while another 1.38 million Americans filed for unemployment benefits last week.
On the business side, 53% of CFOs expect a decrease in revenue of up to 25% in 2020. Another 20% expect major decreases.
As companies worry about staying afloat, and with unemployment at an all-time high, corporate social responsibility might become nothing more than an afterthought. After all, why place such a premium on social responsibility—traditionally a talent attraction tool—when there are tons of top talent eager for work? It’s one extra expenditure that organizations can invest elsewhere.
So, is social responsibility still important in the post-COVID world? Yes, it absolutely is.
The importance of social responsibility in the post-COVID-19 era
Social responsibility still matters in the post-COVID-19 era of work. In fact, it means even more than before.
Businesses seeking to recover from the pandemic need to stand out—and one of the best ways is through social responsibility. A survey found that 70% of consumers want to know what the brands they support are doing to address social and environmental issues, and 46% pay close attention to a brand’s social responsibility efforts when they go shopping, according to Chain Store Age, a retail publication.
In fact, a Nielsen study found that consumer goods brands that commit to sustainability perform better than those that don’t. Nearly 66% of global customers are willing to pay more for sustainable goods, the study showed.
The upshot? Studies show that companies that effectively implement social responsibility are more profitable. Integrating social impact into a business can boost sales by up to 20%, increase a company’s share price by 6% and earn a reputation advantage that’s worth up to 11% of market capitalization, according to a survey by IO Sustainability.
What does social responsibility look like post-COVID-19?
Social responsibility will look vastly different in the next few months than what we’re traditionally used to. Sure, companies can continue with existing initiatives that are core to their values such as climate change and sustainability, but the pandemic has created new forms of social responsibility that leaders can leverage as part of their social responsibility efforts.
For example, employee safety is a huge concern across the professional world. Organizations are tackling this by expanding remote work—both in the short term and long term. Google announced that most employees can work from home until the end of 2020, while Facebook announced that employees will have the option to work from anywhere permanently.
Another is embracing diversity. In light of recent events, organizations with genuine commitments to achieving a diverse workplace are standing out from the competition. As the economy slowly recovers, brands that highlighted their social outreach will emerge with outstanding reputations that customers want to support and other businesses want to partner with.
But it’s more than just marketing. To do social responsibility right requires an ongoing commitment to the causes that companies support. That means taking a stance, creating goals, building working groups that connect the company with community stakeholders on the issue, and then regularly evaluating progress to reach those goals.
Companies must make a long-term investment in its social responsibility efforts. They can’t just pay lip service to them because 65% of Americans do research to make sure corporations are being authentic, according to Investopedia.
Social responsibility is critical to the future of work
The economy is in a fragile state. After months of shelter-in-place orders and business closures, businesses have begun to open this month only to be shut down again in areas where COVID-19 infections have begun to rise again.
Because of the economic downturn, it’s easy for companies to try to abandon social responsibility initiatives to cut costs. However, in a period of uncertainty such as this, the actions of every company will define their reputations in the months and years ahead. Employees and customers will remember who stayed true to their mission and prioritized altruism over cost containment. They must continue to invest in and pursue social change because consumers demand it.
With employee safety and remote work integral to post-COVID-19 social responsibility efforts, organizations must have the right communications tools for remote employees to work productively. Unified communications solutions such as the RingCentral app combine team messaging, video conferencing, and cloud phone into a single platform, allowing employees to collaborate from any location and on any device.