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Why CSR Matters To Your Business

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“The greatest threat to our planet is the belief that someone else will save it.”  – Robert Swan, OBE

New data from Retail TouchPoints indicates that 73% of retail organizations believe the main reason to implement corporate social responsibility (CSR) initiatives is that it’s the right thing to do. A focus on company reputation (50%) and customer preferences (50%) were also among the drivers motiving companies to pursue CSR.

Why do these motivations matter, and what do they mean in the modern landscape of ethical commerce, particularly for businesses recovering from unprecedent upheaval in the retail and CPG world?

COVID-19 triggered a societal equivalent of the individual fight, flight or fawn response. The threats posed by the pandemic caused many consumers to focus on foundational needs such as food, shelter and safety. And, of course, toilet paper. For their part, companies turned their attentions toward similar foundational functions — maintaining the supply of essential products, ensuring the safety of workers and implementing tools to keep the business going in a work-from-home, shop-online, pickup-at-curb landscape.

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With so many resources directed at these critical functions and capabilities, early 2020 saw brands’ non-essential processes drop into a state of suspended animation. CSR plans, even those with strong support at the Board level, made little progress on the ground in favor of efforts aimed squarely at keeping the business viable. CSR stall-out also carried well into 2021, according to Deloitte. But despite the initial shift toward the all-consuming COVID-19 response, brands and retailers should now recalibrate their perspectives. The crisis mode of the pandemic’s crest can’t continue indefinitely, and the horizon must begin to shift back toward longer-term missions and goals.

As the pandemic continues to fuel a mix of nervousness and heightened awareness around the fragility of our environment and our global society’s deep interconnectedness, retailers and brands need to consider the motivations behind their CSR strategies. It’s important to zero in on ethical commerce drivers that not only resonate with socially conscious customers, but that can also deliver meaningful progress toward a better future.

Why now?

Society has come to an alarming point in history on many fronts under the CSR banner. Using environmental concerns as just one example, according to the High Ambition Coalition, “Our future depends on preventing the collapse of the natural systems that provide our food, clean water, clean air and stable climate. To preserve these services, we must protect enough of the natural world to sustain them.”

As biodiversity and climate crises increasingly intersect, how much protection is enough? There is growing scientific research that somewhere around half the planet must be kept in a natural state. While the exact figure remains under debate, conservation organizations have called for an interim goal to achieve a minimum of 30% protection by 2030. This represents a significant jump from current estimates that only 15% of the world’s land and 7% of the ocean are protected, and with less than a decade to bridge the gap.

Similar big goals and big challenges are bubbling in other CSR focus areas. Social equity discussions are gaining new attention across diverse populations. Fair trade and human rights concerns are spreading to new regions and sectors. Community development efforts are growing beyond traditional local perimeters, bringing new supporters (and potential consumers) along with new expectations.

It’s crucial that retailers and CPGs don’t think of CSR as a fringe focus, or something that’s only a vague or futuristic concept for consumers and employees. Brands should now zero in on ethical commerce challenges and opportunities where they matter most for their corporate visions in the day-to-day world, as well as for their customers/consumers and their talent.

An overwhelming 83% of consumers say it’s important that the company they buy from aligns with their beliefs and values, according to a report from PR firm 5WPR. Furthermore, research from PwC concludes that 83% of consumers think businesses should be actively shaping best practices around environmental, social and governance (ESG) social issues.

Brands’ abilities to attract and retain the best talent also increasingly hinge on their commitment to CSR. The same PwC report shows that 86% of employees would rather work for a company that cared about the same issues they do.

Talent management remains challenging for retailers across several major economies. The U.S. Bureau of Labor Statistics reports that retail trade employment is still 176,000 lower than in February 2020. According to the National Skills Commission, Australia’s retail and wholesale employment figures are still down a combined 83,090 jobs as of August 2021 versus two years ago.

Some regions are doing better than others, though trends remain in flux as travel guidance and virus waves continue to impact the sector. Data from the French National Institute of Statistics and Economic Studies shows there are just over 48,000 more retail jobs now compared to the end of 2019, representing a modest 1.5% increase and growth of less than half a percentage point over the previous 3 months.

Forward progress on ethical commerce initiatives can be hugely impactful in connecting with top job candidates and building loyalty among existing workers.

It’s time for retail and CPG companies to focus on their long-term CSR plans, re-evaluate them against what’s important and update them leveraging the latest technology available. Then, make them once again a central focus for your company rather than a nice-to-have initiative. That means putting your CSR action plan on the leadership team’s agenda and developing meaningful milestones and measurements of your current state and progress.

Brands should use this opportunity to implement the processes, skill sets and technologies needed to tackle important CSR campaigns. Action is needed, not just because CSR plans are good for engaging local and global communities and for living up to expectations of a good corporate citizen, but also because they’re the right thing to do from a future-proof business sense and a talent perspective. Those retail and CPG brands that choose to prioritize CSR in the post-COVID-19 environment will reap the rewards far into the future.

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