Corporate Social Responsibility: What Is It and How To Do it Well

This is a transcript from a panel discussion at the Pensacola Socialdesk. Innisfree Chief Marketing Officer, Jill Thomas was invited to participate as a member of the panel which was called Profiting from Doing the Right Thing! How Corporate Social Responsibility Can Boost ROI. 

Jim Sparks: Most simply put CSR it is a structured approach to maximizing the impacts of how businesses do good in the world, often in areas beyond direct company interest.  

The types of CSR programs in the world are as varied as the types of businesses and encompass tactics that vary from corporate philanthropy to company-sponsored volunteerism, or programs focused on reducing energy consumption.

There was an evolution over the last 100 years and many different approaches.

Corporate Philanthropy includes charitable contributions from the company.

Corporate Social Responsibility means aligning company values with the outcomes with business projects.

Shared Value means looking for new opportunities and ideas to add value to the business while fostering sustainability and social justice. Activities might include examining your supply chain.

Social Enterprise means specifically creating a for-profit organization that exists to solve a problem in the world.

What are some more examples of successful CSR in the U.S.?

Daniel Jacobs: A great example of CSR is CVS. They withdrew tobacco sales because they are a wellness company.  Then there are people that have been doing it since they started their business.  Companies like Ben & Jerry’s, Patagonia are disrupting their industry and high level of materiality in that their CSR efforts.

Google, Facebook Apple are in a race for renewable parity. It looks like Google is going to be the first company in the U.S. to reach a goal of using 100% renewable energy. They are going to set the standard, and this will be a massive boon for their recruitment and retention.

Can you Outline the Risks of Inauthentic Behavior?

Mona Amodeo: The question to ask is how do we embed sustainability into the culture, so it is not an add-on but a truly integrated piece. Sustainability needs to be an approach to business and anchored in your values. For it to be authentic, it needs to be it needs to be core to who an organization is, not just what they do. You “be” sustainable not “do” sustainability.

If you come from the perspective of embedding it in your core values, authenticity isn’t a problem. The problem will occur if your actions are out of alignment with your words.

Embedded in this idea is that everything we do makes an impact, so we need to be very purposeful about what we are going to do. We need to think about how do we get with leadership to embed these things in the organization.

What about branding?

Mona Amodeo: For a business to survive, you have to have people choose to work for you and do business with you. That is branding. Branding is not glitz and spin. It is tying people you work with and serve to who you are and what you do. You need to tell the whole story in a compelling way. 

You can’t come at CSR from a transactional perspective and say we are going to do this to get this. It has to be what you are about. You have to say these our values and this is how we express those values.

From whom does Innisfree draw inspiration when developing its CSR programs and initiatives?

Jill Thomas: Initially, it was our founders, Julian and Kim MacQueen and their approach to business. Innisfree was founded on (and has always operated on) the idea that business exists to make a positive contribution in people’s lives.  A couple of years ago we did an audit of Innisfree’s charitable giving, and the number was big, and we thought wow if we channeled our human and capital resources we could make a significant impact on issues our founders really care about. Then Julian and Kim decided to make Innisfree a legacy company meaning they are setting up a governance structure (via a board of directors).  This board will be responsible for carrying forth their vision of a Triple Bottom Line company to future generations of Innisfree employees and the Hive will be the vehicle.

When we set it up we thought a lot about how to structure and put our CSR program. Asked ourselves what we wanted it to do, how does it align with the business? Some of the people working at Innisfree are struggling with various social issues, so we also asked ourselves how does the CSR improve the lives of our employees?  

We take inspiration from other Triple Bottom Line companies and are members of an organization of socially responsible business called the Social Venture Institute. They offer great resources and conferences for sharing best practices.

We also draw inspiration from CSR programs of large companies blazing a trail in this field. Some of my favorite examples are American Express, Starbucks, Microsoft, Patagonia, Toms and Warby Parker.  Each of these is a good example of different approaches such as being activist-oriented (around causes the founders care about), to operating like charitable foundations (soliciting grant applications) to fostering on employee-led community volunteerism. 

We are still working on our approach.  Our goal is to focus our resources on projects that make a difference, that drive significant social change. We are still finding our footing, and our approach may change over time. 

What is the ROI of CSR?

Jill Thomas: More and more companies have CSR programs because research shows that if they are well executed and promoted, they have many positive financial impacts. Note a good marketing plan for your CSR program is necessary. Innisfree has a sophisticated marketing program supporting our CSR that supports it both internally and to the outside world.

CSR is increasingly a factor regarding where talented people choose to work, especially Millennials.

Employee engagement and longevity is another factor. Employees who feel good about where they work to provide better service and quit their jobs less often.

Improved business relationships is another factor. Partners, investors and vendors also like to feel good. We are currently doing an RFQ for a large hotel management contract that will bring in $1 million dollars in revenue and we stand out because of our CSR program makes us stand out. They FRQ process application specifically asks to prove we can manage a sustainable business.

If promoted properly CSR can have a very positive impact your company’s public reputation and therefore help you attract new customers.

CSR also encourages innovation in that it can help your team think about your products and business processes in a new light.

With Innisfree having properties around the country, how much of the CSR efforts are centralized, and how much are in control of each property?

Jill Thomas: Right now our CSR efforts are centralized and focused on our hometown of Pensacola. We chose to start with this approach to consolidate our resources and giving into a few projects where we think we can have a significant impact instead of spreading ourselves thin. We need to figure out how to integrate our increasingly distributed workforce in a meaningful way and to align our CSR with our business operations. That’s the next step.

What are the drivers that lead companies to engage in CSR programs?

Daniel Jacobs: Many companies think unless Greenpeace is rappelling down their building they have no interest in CSR. Others do right from the beginning and build a business around it. For any business there must be a return, need to build a business case for it. Sometimes finding this return is like that is pushing a boulder up a hill.

The big thing now is recruitment and retention, hiring people who have values that are aligned with your business. CSR programs help you recruit employees on more than base salary. These value-based programs enable you to bring the right people to the table.

Haris Alibasic: There is also an element of peer pressure and local recognition. You get kudos as a region and attract talent if you are good at it. A good example is the West Michigan Sustainability Program. They initiated a sustainability plan with many stakeholders.

Pensacola is lucky to have an organization of people looking at climate change and climate resilience and how to make investments in renewables. Companies are looking at this as an investment strategy, and of course, some of this is cost reduction, want to see that energy efficiencies and renewables have a payback. West Florida could benefit from this as a regional goal.

Mona Amodeo: For a business to survive, you have to create an environment where people choose you over everyone else. Branding is tying people to the core idea of who you are and what you do.  It is a whole system.

You can’t come at this as we are going to do this to get this. Business ethics matter, why are we here and what are we all about.  Do you need to think about how do we express those values?

Millennials will choose to work for a company for less money because of the values that they hold, and they will retain and stay with that company for longer. They will pay more money for products.

Being honest about who you are and living your values through your products and services will get you a return on reputation.  It is a huge driver.  Businesses who don’t get this will not be here in the future.

What techniques can companies employ?

Daniel Jacobs: We do a good job of making it complicated when it doesn’t need to be. Just take small steps. Just do it.

Most people who do CSR are very open about what and how they are doing it. Way more open that other business conversations, a common goal, same journey and moving in the same direction, connect with companies in this space because they offer up good mentorship opportunities.

There are resources in this city they just need the voice, someone directing the traffic and framing it. Start the conversation. Say this is on the agenda and we are going to move the agenda forward.

Jill Thomas: Embedding it in your culture and defining a purpose and communicating this to your employees. Find and hire people who align with your values.  

Haris Alibasic: Make sure that your budget process that is attached to vision and goals. Set target goals. Need to know the numbers on the baseline of where you currently are. Having targeted goals that you can report with numbers will reduce the uncertainty about the commitment.

Mona Amodeo: Every organization has a story to tell. Be clear about your story. Be transparent about what you believe. Sustainability is about respect, for your community and being open and honest. A believer in being passionate and telling a story in a passionate way. 

Daniel Jacobs: Listen carefully to your employees and see what they care about. The program we did for Walmart called Do One Thing. For Walmart is about health and wellness. Said here is what we want to do you pick something you want to do and we will support you. Position yourself as a support mechanism for engagement.  Get people to buy in, so they feel they are part of something bigger than themselves. That will lead to a snowball effect as more and more of your employees get involved and take them.

Foster CSR focused on the personal growth of employees to teach skills like how to buy a car and other life skills.

How does Innisfree Measure ROI?

Jill Thomas: That is a big question and one that we are still working on. At Innisfree, we are happy about all the positive outcomes of our CSR program, but in the end, we do good to be good. In fact, we think that businesses have a responsibility to do good in the world and this underpins our corporate core values. Businesses, because of their resources, economic influence and expansive communities of employees have special powers when it comes to making the world a better place.

We would have a CSR program even if there were no financial benefit. Luckily there is.

We produced our first corporate CSR report in 2016, outlining our projects and their successes as well as how much money we contributed and fundraised. Simple reporting is a good place to start.  It was a great exercise because I was astounded at the end of the year about how much we accomplished. 

We also manage hotels under various large brands such as Hilton and Intercontinental Hotel Group.  These companies also have CSR programs with measurement protocols especially in regards to sustainability.  These programs provide established metrics to track sustainability indexes such as water and energy. 

I think the key is to track whatever you can. Try to find stuff you can count and then report on it. Find metrics you can measure in numbers. Celebrating success is one way to keep your company leadership team engaged.