Even though CSR or corporate social responsibility is regulatory act, it’s not just about complying with it. CSR, if done well, can make or break a company’s reputation. CSR (Corporate Social Responsibility) initiatives are becoming the heart and soul of how companies are thinking about their future strategically and responsibly.
Instead of seeing CSR as an onerous imposition and a 2% tax, see it instead as a 2% investment in building corporate reputation, employee engagement and innovation. In the book Marketing 3.0, the writers- Hermawan Kartajaya, Iwan Setiawan, and Philip Kotler- show the evolution of marketing from product-based to consumer-based to values-based marketing.
Brand equity is defined best as assets associated with a brand name that increase the value of the product or service of an organization. An organization’s reputation can be a strong reason for the company to engage in socially responsible behaviour. Brands that initiate positive movements make customers feel good about themselves. In fact, one study found that 75% of a company’s value is the result of its reputation.
One of the very important arguments in today’s time is whether or not CSR should be used for brand building. The view on this is majorly divided, with one set of people being very conventional about social responsibility as charity for a great cause, while the other has a more capitalist approach of gaining while performing social responsibility in order to create a balanced cycle of the same.
Of course, while using CSR for brand building the business entity needs to be honest and transparent about their activities, and not just make a big hoo-ha about nothing. Eventually, cheating never escapes the public eye, and the company may lose all their credibility, for which it created the brand in the first place.
There also are a few parameters the company needs to adhere to while having a capitalist approach towards their CSR:
- CSR cannot be an extension of their marketing/branding team. It needs a dedicated department or opt for external CSR expertise with people who are more creative and socially inclined.
- In doing so, companies often have very little or no integration between CSR and marketing departments and their respective strategies. This misses brand building opportunities and may also confuse as well as disenfranchise company stakeholders. Hence a constant interaction between the departments is essential.
- The first critical step in developing an integrated and effective CSR strategy is to assess how CSR investments support business objectives and practices.
- The CSR budget must be used to create real assets and not merely sponsor high visibility activity like charity shows. Morality will go a long way.
- Long term commitment is extremely vital here. It is important to do good constantly and consistently.