Why is CSR Important? And What Does it Mean for 2020?

The expectations of modern consumers are very different. Today, convincing customers to make a purchase or invest in a brand is a lot more complicated. Consumers don’t just want to know about your products and services, they want to know if your business is socially responsible.

CSR (Corporate Social Responsibility) has been making its way to the fore of marketing strategies in the past few years. The democratization of information online has made the flow of ideas easier than ever before. And as a result, people are becoming more aware of the concepts of social justice. Climate change and sustainability, human rights and political activism are becoming increasingly mainstream, and this has made the everyday consumer more socially conscious. Or, at the very least, feel they should be.

Why is CSR important?

The consumer landscape has changed dramatically since the introduction of the internet. Not only are the channels consumers use to make purchases more varied, but the reasons behind their purchasing decisions have changed. An astonishing 94% of Gen Z’ers now think a company should address pressing social and environmental issues, and 73% of Millennials, despite growing up in one of the most economically hostile climates for a generation, are still willing to pay more money for sustainably made goods.

Because of these changes, it’s important for companies to recognize the shift towards social responsibility if they wish to engage younger audiences, protect their brand from competition and attract top-tier talent to their business.

The approaches to CSR vary. Some companies choose to fully incorporate social responsibility into their business while others simply opt to implement programs and campaigns to bolster their CSR credentials. Here are four ways CSR is commonly put into practice:

SRB (Socially Responsible Business)

The most comprehensive approach is the SRB. These for-profit ventures seek to leverage their business to make the world a fairer and more sustainable place; think Lush or LMB.

Community-based developments

These initiatives are designed to help local communities. By helping local people to upskill, businesses can improve their public image and improve the caliber and skills of potential employees.

Partnerships

Partnering with charitable causes or using Fairtrade certified products in your supply chain is a great way to promote CSR. It can consolidate large brands with Fairtrade practices and attract public funding through tax relief or government aid.

Philanthropy

This involves donating money or products, or volunteering time to a good cause. Many companies choose this route as it’s quick. However, it’s not necessarily the most constructive approach and can lead to accusations of charity washing.

What does 2020 hold for CSR?

As consumer trends evolve, so does CSR. And 2020 looks to be an important year in its implementation. 2020 will see more businesses take a proactive approach to CSR and attempt to learn from the lessons of the past to make their company more socially responsible. This will change as the political and economic landscape takes shape, but you should expect to see the following trends:

Learning

The #metoo movement was a powerful force for change and its effects are still being felt today. Workplaces are having to navigate issues like workplace harassment and pay equity, so expect to see more training classes and formal lessons in governance and accountability.

A focus on the long-term

Consumers want brands to stand for something, but one-off charitable donations are unlikely to cut it. Consumers are looking for businesses that are focused on providing long-term initiatives that help communities in the long run. Small in-office charity events and sponsorships are still valuable, especially on social media. But the days of lone charity campaigns are running out.

Generation Z

Those born after 1998 will make up 40% of all consumers by 2020 and are set to spend a staggering $44 billion. This means businesses hoping to capture a significant slice of this revenue will need to up their CSR games. As Gen Z enter the marketplace, expect to see greater demands for social justice, transparency and technology that’s easy to use.

Final thoughts

CSR is an important part of private business. Organizations hoping to tap into the next generation of shoppers will need to think carefully about how their CSR initiative deals with consumer concerns and affects decision making. Incorporating meaningful, long-term changes will help you create a CSR strategy that effectively targets consumers, builds your brand and establishes your company as socially responsible.