Women In Business

Why corporate responsibility can be more than a marketing tool?

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When I first started implementing CR policies almost two decades ago in the mining sector, it was thought of as a strategic play reserved mainly for the top end of town. However, today this is no longer the case.

In the last decade, environmental and social awareness has been on the rise, driven by increased scientific understanding alongside broader value changes. Young people, who have grown up during this socially conscious era, are reflective of this trend, with 78% of people aged 18 to 34 concerned about climate change.

While corporate responsibility was born in a somewhat ad-hoc way in response to environmental issues, in recent years it has developed to encompass wider social concerns. There’s now an expectation that companies consider the impact of a product or service on the wider community and in turn respond genuinely and proactively.

That’s why it surprises me that many companies are missing the opportunity to execute a CR program that’s cohesive and linked to strategic intent. Companies should strive for positive internal and external change, that’s when they can truly offer a competitive advantage while simultaneously delivering more positive environmental and social outcomes.

A successful business leader should challenge the status quo and ask why things are done a certain way. Whether you’re working in a corporate environment or steering the ship of a small business, creating and implementing a CR strategy can have wide-reaching positive effects on the business.

Competitive advantages

It’s no secret that having a point of difference helps you stand out among your competitors, but have you ever considered how corporate responsibility can achieve this? Studies have shown that publicising CR initiatives in marketing can play a role in consumer evaluations beyond economic and ‘rational’ considerations such as product attributes, even going so far as to have a spill-over effect that continues to influence long-term customer relationships.

Many companies have now realised that there is an opportunity to allow corporate responsibility priorities to guide a core business offering. Whether that is by offering a Socially Conscious investment option like at VicSuper, or pledging to distribute 4% of after-tax profits to projects that benefit the social and environmental issues important to customers, as Bank of Australia has done. These business leaders are transforming their whole business model to deliver co-benefits and shared value to stakeholders, customers, the community and the environment.

Operational advantages

An effective CR strategy should be more than something you write down and forget about for most of the year. In fact, when properly implemented it can have a huge impact on the day-to-day operational running of your business, including budgeting, hiring policies and staff retention, and even the internal development of ideas.

Many CR strategies start with a commitment to diversity, which studies show can have a positive effect on performance and shareholder return.

Alternatively, if CR is focused on environmental principles such as sustainability and a commitment to reducing carbon footprint, then that policy should extend well beyond your office to your products and services too.

Social & environmental advantages

In terms of the environmental impact that Corporate Responsibility policies can have on a company, a commitment to managing climate change risks or addressing issues specific to developing countries can help to generate positive community and employee outcomes.

CR strategies present an opportunity to connect with what’s at the heart of every business. They are what make consumers connect with your brand and feel as though they’re part of a community, but most importantly they help to encourage long term loyalty with brands that share similar values.

My experience with implementing and managing corporate responsibility strategies has proven that companies need to be aware of the wider ramifications of their social policies and be prepared to follow through on their promises if they want to be successful with the next generation of consumers. Ultimately, operating within a bubble and ignoring the wider impact of your company’s actions will threaten its survival.

About Kirsten Simpson

Kirsten Simpson is Manager of Corporate Responsibility for profit to member superannuation fund, VicSuper. She has almost two decades of experience managing and implementing sustainability, corporate responsibility and responsible investment strategies. Kirsten is a Community and Industry Advisory Board member with The University of Melbourne’s Office for Environmental Programs and the chair of one of the UN backed Natural Capital Finance Alliance working groups.

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