Samuel Ekow Arthur, author
The concept of Corporate Social Responsibility (CSR) requires businesses and organizations to have the general wellbeing and concerns of society at heart, rather than profit-making. Organizations are seen as artificial citizens, and for that matter, owe their allegiance to the improvement of society.
The World Business Council for Sustainable Development defines CSR as “the commitment of businesses to behave ethically and to contribute to sustainable economic development by working with all relevant stakeholders to improve their lives in ways that are good for business, the sustainable development agenda, and society at large".
The contribution of organizations, businesses and individuals in the fight against Covid-19 has accounted greatly in the government’s effort in combating the virus.
Over the last few months, we have seen many organizations in Ghana donating to the Covid-19 Trust Fund and the Health Ministry in support of the fight against the novel corona virus.
According to the chairperson of the Trust Fund, Lady Chief Justice (Rtd) Sophia Akuffo, the Trust has so far received GH¢ 44,900,000.00 in donations (Peacefmonline.com, 2020).
These donations by corporate bodies have indeed augmented the government’s effort to nib the virus in the bud. In the same vein, the support provided by these organizations are in the right direction as it allows the organizations to kill two birds with one stone.
CSR activities create an avenue for businesses and organizations to act ethically and strategically to cement their role in both society and industry or market of operation.
Some businesses, especially those in the mining and oil and gas sectors, embrace their ethical obligations through CSR, as their operations can greatly harm people, the environment, and society at large. CSR initiatives by these companies to restore the environment and contribute to the wellbeing of affected persons and communities help to recognize these firms as socially and environmentally responsible.
The act by these organizations to complement the government’s effort in the fight against Covid-19 positions them as socially responsible and ethical as they help to address the challenges being faced by society.
It is worth noting that the ethical obligation of businesses is not limited to the environment and social concerns, but extends to ensuring that the approved standards in the quality of their products are upheld, including responsible advertising and employee care.
Secondly, CSR activities provide the platform for organizations to benefit economically. These benefits can be classified into tangible and non-tangible benefits. The tangible has to do with the bottom line of a business (financials) whereas the non-tangible deals with brand image and reputation, brand affinity, among others.
Inasmuch as some sources preach the tangible benefits of CSR, there has not been any research to substantiate this claim. However, the non-tangible benefits of CSR, which arguably contribute to the growth of businesses, are essential to the sustainability of a business.
With a well thought through PR strategy, businesses through CSR initiatives such as the donations in support of the Covid-19 fight can be of great benefit to businesses:
Some of these are Building of brand image and reputation. Image and reputation remain key assets to businesses. CSR thus provides the platform for companies to build positive and lasting images that increase customer trust and brand affinity.
A recent study from Reputation Institute, a private global consulting firm, found that 42% of how people feel about a company is based on their perceptions of the firm’s CSR (Reputation Institute. 2020 cited by Forbes.com). That means CSR is key to building a strong brand image and reputation for your business.
Also, CSR helps increase customer loyalty. CSR programs work to showcase and demonstrate corporate values, as a result, customers are more likely to be loyal to your brand if your corporate values align with theirs. In a 2016 Neilson survey, 56% of the participants said “a brand being known for its social value” was a top purchasing driver and 66% of participants said they were willing to pay more for products and services from socially responsible companies (Lanphear, 2019 cited by US Chamber of Commerce Foundation).
Additionally, CSR ensures Brand differentiation. CSR differentiates a company from its competitors by engendering consumer and employee goodwill.
Companies such as Kasapreko Limited and Twellium Industries with Awake mineral water and Verna mineral water, gained competitive edge and some uniqueness in the mineral water industry through their CSR initiatives.
Sustainability of business is another essential benefit of CSR.
Sustainability is an effort to look at a company’s long-term interest and ensure that the company’s future is well-maintained. In the case of the extractive industry, for example, their contribution to the community and environment grants them the moral or ethical license to operate, ensuring their sustainability in business.
Corporate social responsibility is more than just a business trend.
Businesses that want to stay relevant to new generations and seek to help people, the environment and society at large while increasing their own revenue and efficiency will benefit from embracing CSR.