Around the world, organizations are stepping up to address the ‘E’ in ESG. With the growth of schemes to reduce GHG emissions and monitor water consumption, for example, many businesses are recognizing their role in caring for the environment and creating a more sustainable future.
But what about the ‘S’ in your ESG strategy? In fact, corporate social responsibility (CSR) is a core component of ESG, encouraging organizations to take ownership of their impact on society.
Beyond minimum wage policies and worker health and safety, however, many businesses are now seeking to push this one step further by embracing corporate philanthropy. It’s a focus that sees organizations giving back through charitable contributions such as donations, volunteering, sponsorships, and in-kind donations.
So, why are savvy businesses taking this step? Here are 3 reasons why corporate responsibility and philanthropy are critical to your ESG strategy:
1. Your Stakeholders Care
In a world where activism is on the rise, your stakeholders care about the impact of your organization. More and more, people are voicing how much they value corporations that positively interact and give back to communities.
Whether that’s your employees, shareholders, or members of the communities in which you operate, people value the efforts your organization makes to give back with purpose.
And so do your customers. More than 87% of consumers support companies that advocate for issues they care about, with many saying that a company’s primary purpose should include ‘making the world better’.
When you act to prioritize corporate responsibility and philanthropy as part of your ESG strategy and reporting, you can create positive impacts on society and improve how stakeholders see and value your efforts.
2. Employees Value Purpose
It’s no secret that organizations have been struggling recently to find and retain employees. Unfortunately, one of the reasons behind this is the focus on profits over people that many organizations still follow.
Studies show that nearly 70% of employees wouldn’t work for a company without a strong purpose, so it’s no surprise that focusing on the positive impact your organization can create helps to build and maintain a happy workforce.
At AMCS, many of our charitable and social initiatives are employee led. Like most staff, our team care and want to make the world a better place. Organizations that embrace this sentiment can foster greater employee engagement, satisfaction, and retention.
3. Profitability Follows Purpose
When consumers, employees, and other stakeholders are paying attention to corporate responsibility, it’s clear that focusing on the ‘S’ in ESG isn’t simply good for society, but also for profitability and stock price.
In fact, studies show that socially-conscious companies had the highest growth in stock price over the past 20 years and have historically seen higher returns.
Despite this, corporations still only make up a very small percentage of total charitable contributions in America, which leaves a huge opportunity for organizations to realize reputational, employee, and financial benefits by implementing social initiatives like fundraisers, corporate sponsorships, or volunteer programs.
In effect, when you embrace corporate responsibility and philanthropy within your sustainability strategy and ESG reporting, you can influence positive change in the world, but also realize organizational benefits because when businesses evolve their focus, the financial benefits will follow.