Corporate Social Responsibility (CSR) is the organization’s strategies oriented to operate with ethical, social, and environmental responsibilities and obligations to its employees, customers, suppliers, shareholders, communities, and stakeholders. It involves going beyond the legal obligations to consider the impact of a company’s activities on society and the environment and taking actions that contribute to the well-being of communities, stakeholders, and the planet.
CSR activities can support charitable causes, improve employee workplace conditions, company inclusion, respect for life, create environmentally friendly products, etc. Businesses are human organizations that are part of a society and part of a country, so the old saying that “business is business” is no longer a 100% true, valid statement. The view of a business as a purely economic entity focusing only on generating profit regardless of its impact on society is not perceived as something positive for consumers.
And it has never been like that. CSR is not a new concept, even though it sounds. However, today it is more relevant due to how easily the information can be available to consumers because of the Internet and social media networks.
In the past, it was tough to know if a company was abusing its employees in China or if a company located in a country in Central America was polluting a river due to its economic activity. Today, because of the Internet and Social Media Networks, information fluid quickly. If a company in Singapore that produce sneakers treats their employees like slaves, in a matter of seconds, somebody in Germany can catch this info and spread it over Instagram, or somebody who discovers a roach in their “chicken tenders meal” can post a video on TikTok. Also, the quality of products, the quality of the work environment, everything is now under the gaze of everybody.
Can CSR help build brand equity?
The short answer is yes. Brand equity is the value a brand adds to a product or service. Strong brand equity can result in higher customer loyalty and trust. Brand equity results from brand reputation, awareness, associations, and customer experiences.
So a business involved in CSR activities can receive a positive or negative impact on its branding efforts, depending on its target audience. Building brand equity is not an easy task and involves many aspects, CSR is one of them.
One thing is to take a position in favor of zero carbon emissions and participate in efforts to offer clean water to people with these needs in Africa. Another thing is taking place in the political arena to favor a liberal or conservative group. The first two activities can be perceived as positive by the majority of people, even for people who are not part of the target audience. However, taking a political position can be risky for the brand if the cause is not generally accepted. For example, taking part in favor of Ukraine and not in favor of Russia during the war can be perceived as a positive for the majority. Still, the opposite can be catastrophic for the brand and even with legal actions against the company. CSR is so important that many corporations have a CSR Chief Officer or Head of Corporate Citizenship.
How CSR could help to build brand equity:
- Positive Reputation: Companies that engage in CSR activities and have a solid commitment to social and environmental responsibility are often viewed more favorably by consumers, employees, and other stakeholders.
- Increased Brand Loyalty: CSR initiatives can build customer trust by demonstrating a company’s commitment to ethical and responsible business practices. Customers who trust a brand are likelier to remain loyal and recommend it to others.
- Employee Engagement: CSR initiatives can also enhance employee engagement by creating a sense of purpose and meaning in their work. This can lead to higher job satisfaction, reduced turnover, and improved employee productivity, positively impacting a brand’s reputation.
- Differentiation: By incorporating CSR into its business strategy, a company can differentiate itself from its competitors and stand out in the market.
Case study: Experian
Experian, along with Equifax and Transunion, is one of the largest credit bureaus in the United States, providing credit reporting and other related services to individuals and businesses. According to their website, “They handled the data of 1.3 billion people and 166 million businesses worldwide”
They have a dedicated page for CSR. When you visit Experian CSR page, you will find the following statement: “Creating a better tomorrow for consumers, clients, global communities, and our people.” Some of the highlights of the Experian brand core values are:
- Working with Integrity. At Experian, that means treating our data, people, and environment respectfully.
- Investing in the community. They participate in many volunteering activities in Orange County and offer 16 hours of volunteering paid time off to employees to participate in different activities.
- Partnerships. They have the United for Financial Health to empower vulnerable people by financial education by partnering with Non-Profit Organizations.
- Unlocking data. They offer different services to consumers to improve their credit scores, global hackathons where employees collaborate to solve business problems.
- Valuing our people. They offer great benefits to their employees, including paid maternity leave to parents.
Experian is doing a great job involving its employees to give back to the community, innovating in new data technologies, financial education, and philanthropy projects. Also, offering great benefits to their employees, such as paid maternity leave to parents, and get them involved in their CSR programs through paid volunteering hours. And most important, offering accurate and valuable services to consumers that have kept them a respectable company in the financial service field.
