More on CSR

Not all companies approach CSR in the same way. What they do depends upon their resources, available assets, and corporate culture. In addition, some companies perceive more benefit from one type of CSR than another. The personal beliefs and priorities of senior management or owners can also influence the company’s approach to social responsibility. Below are some different approaches to CSR.

Corporate Giving

corporate philanthropy

Corporate philanthropy refers to a corporation’s gifts to charitable organizations.

We sometimes think of a donation as a gift that has no conditions, where the giver expects nothing in return except for the pleasure of doing good. However, corporate donors usually do expect something in return. At a minimum, most corporations expect that their donations will be publicly attributed to the corporation, generating positive public relations. When corporations make large cash gifts to universities or museums, they are usually rewarded with a plaque or with a building or library named after the donor. These visible signs of a business’ generosity improve the corporation’s public image. This type of CSR is undertaken with the business’ marketing or public relations strategy in mind.

Promoting Awareness

cause-related marketing

Cause-related marketing (CRM) refers to a corporation’s associating the sales of its products to a program of donations or support for a charitable or civic organization. The basic idea of cause-related marketing is that the corporation markets its brand at the same time that it promotes awareness of the given social problem or civic organization that addresses the social problem.

A well-known example is the pink ribbon symbol that promotes breast-cancer awareness and is used prominently in the marketing of special lines of products by many corporations, such as Estée Lauder, Avon, and New Balance. In addition to marketing products with the pink-ribbon symbol, Estée Lauder has made support for breast cancer awareness one of the defining features of its corporate philanthropy. Thus, Estée Lauder also frequently refers to such charitable contributions, currently on the order of $150 million, in its corporate communications and public relations documents.

Environmental Sustainability

sustainability

Sustainability is a concept derived from environmentalism; it originally referred to the ability of a society or company to continue to operate without compromising the planet’s environmental condition in the future. In other words, a sustainable corporation is one that can sustain its current activities without adding to the world’s environmental problems.

Sustainability is a very challenging goal, and many environmentalists maintain that no corporation today operates sustainably, since all use energy (leading to the gradual depletion of fossil fuels while emitting greenhouse gases) and all produce waste products like garbage and industrial chemicals. Whether or not true sustainability will be attainable anytime in the near future, the development and promotion of sustainability strategies has become virtually an obsession of most large corporations today, as their websites will attest in their inevitable reference to the corporation’s sincere commitment to sustainability and responsible environmental practices. No corporation or corporate executive today will publicly say that they don’t really care about the environment. However, if we observe their actions rather than their words, we may have cause for doubt.

Social Goals

social entrepreneurship and social enterprise

Social entrepreneurship and social enterprise refer to the use of business organizations and techniques to attain praiseworthy social goals. The difference between social entrepreneurship and CSR is that, with social entrepreneurship, the positive social impact is built into the mission of the company from its founding.

The Body Shop was founded by noted activist Anita Roddick, who insisted that all products be derived from ingredients that were natural, organic, and responsibly sourced. Her employment policies famously allowed every employee to take off one day a month from work to engage in social or community projects. Similarly, Ben & Jerry’s was founded to promote the use of organic, locally-produced food. The company’s founders insisted on a policy that executives earn no more than seven times the salary of factory line-workers (although this policy was eventually relaxed when it became difficult to recruit a competent CEO at those wages). Newman’s Own was founded by actor Paul Newman and his friend A. E. Hotchner with the goal of selling wholesome products and giving away 100 percent of the profits to charitable ventures. To date, Newman’s Own has given away more than $570 million to organizations that help children who face adversity.^[1]

social marketing

Social marketing refers to the use of business marketing techniques in the pursuit of social goals. Often, governments and nonprofit organizations make use of social marketing to make their points more forcefully and effectively to a wide audience.

A common example are commercials warning of the dangers of unsafe driving. The source of social marketing advertisements is often a local government or nonprofit organization. Sometimes these are called public service announcements. Here’s an example from the American Automobile Association that highlights the dangers of texting while driving.

You can view the transcript for “AAA Don’t Drive Intexticated PSA” here (opens in new window).

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