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CSR: What is Corporate Social Responsibility? Definition Examples Benefits - YouTube
Channel: Sustainability Illustrated
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Hi folks, Alex here. Most corporations are
in the business of making money. But there
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are many ways in which they can take responsibility
for their socio-environmental impacts and
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there is much to gain by doing so… This
is often called Corporate social responsibility.
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In this video we are going to talk about what
we mean by CSR, why good corporate citizen
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make a lot more profit and we’ll look at
examples like IKEA, Starbucks and Patagonia
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to see if we can figure out who is real and
who is faking it. Ok, Let’s get drawing!
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On this channel we share tools for YOU to
change the world so subscribe if you’re
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into that.
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This is why companies have to take corporate
social responsibility seriously. This is a
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representation of all the major socio-environmental
scandals IKEA was involved in worldwide between
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1981 and 2006. These were about waste, dangerous
chemical use, child labour, poor working conditions
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in factories, wood procurement, etc. And this
is not because IKEA is worse than the others,
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if anything, it is probably one of the more
decent corporate citizens out there, but any
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major corporation is under a lot of scrutiny.
Add to that the fact that 40% of consumers
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seek purposeful brands and trust in brands
to act in the best interest of society, 70%
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of millennials listed their company’s commitment
to the community as an influence on their
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decision to work there and 50% of millennials
say they would take a pay cut to find work
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that matches their values. CSR matters!
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Originally, corporate social responsibility
was a self-regulated way for businesses to
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include philanthropic and charitable contributions
in their organizational policies. With the
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emergence of environmental issues such as
climate change, toxic substances, plastic
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pollution, etc., NGOs appeared, as well as
industry-wide, national and international
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regulations and social pressure became greater
forcing corporations to address and report
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on the way they were running their business.
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Nowadays, when businesses report on their
CSR, it usually includes their business ethics,
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how much money they donate to charitable organizations,
compliance with regulations, norms, standards
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and labels, working conditions, how their
business affects local communities where they
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work, the environment, their supply chain
and their carbon footprint.
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In other words, Corporate social responsibility
is about capturing opportunities and avoiding
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risks. According to Bob Willard’s research,
any company that embeds corporate social responsibility
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within its DNA can increase its profit dramatically:
by 51% for small and medium businesses to
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81% for a large corporation. Mostly through
these 7 benefits:
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Increased revenue and market share due to
better products and more customers
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reduced energy and waste expenses
reduced materials expenses from dematerialization
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and substitution (see my video on circular
economy for more details on this)
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increased productivity and reduced turn-over
because people like working for a company
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that does good in the world
and reduced risks on talent management, brand
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image, compliance to regulations, customer
demand, etc.
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(there is a link in the description below
if you want to find our more about that)
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Essentially, corporate social responsibility
is now another word for corporate sustainability
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and it is just smart business.
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Let’s looks at a couple of examples of what
companies do. When searching online for companies
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reputable for their CSR, I ran into Starbucks
many times so let’s have a quick look at
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what they are doing. On the social front,
they claim that their coffee is 98.6% ethically
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sourced (meaning fair trade, there is no mention
of organic), that they trained 200,000 farmers
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and invested in farmer loans and emergency
relief funds. Now, Starbucks has to do this
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because the business of coffee growing is
at risk altogether due to farmers worldwide
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not having the financial means to adapt to
climate change and the fluctuating price of
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coffee. In 2019 before the pandemic, 2.8%
of the drinks were served in reusable cups.
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As an order of magnitude, this left more than
3 billion disposable cups going to the landfill.
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And the disposable cups are made of 10% post-consumer
fibre. I personally don’t call that “leading
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in sustainability.” In a trash audit performed
by Greenpeace in 2019, Starbucks also ranked
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as the 3rd most polluting company in Canada,
where I live.
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Another name that comes up often in the world
of CSR is Patagonia but in contrast, they
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acknowledge at the top of their sustainability
web page that “everything they make has
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an impact on the planet.” On the environmental
side, 64% of their materials are made from
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recycled fibres and since 1996 100% of the
cotton they grow for their clothes is grown
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organically. On the social side, 82% of their
line is Fair trade certified sewn impacting
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more than 72,000 workers. They are also part
of 1% for the planet providing support to
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environmental non-profit organizations around
the world. More importantly, Patagonia produces
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videos engaging their customers to buy less
and demand more
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from their clothes.
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But how do you figure out who is genuine and
who is faking it? Well, to be honest you have
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to educate yourself and use your own judgement
to read between the lines of companies’
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slick marketing. For me, a good rule of thumb
is to make sure that I look at both 1) how
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companies make their profit (for example what
are the direct and indirect environmental
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impacts of their products and services, my
video on the sustainability analysis of iPhone
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can help for example and how do they treat
their people and suppliers in the process);
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2) And secondly how they spend their profit
(do they invest in their people, in sustainable
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innovation or are they making their shareholders
richer?) As fellow Youtuber “Our changing
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climate” explained in a recent video, the
money donated to charities can be misleading
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and doesn’t tend to address the root causes
of our sustainability challenges. Finally,
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tools and frameworks like the ones I presented
in previous videos can also be helpful to
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make up your own mind in a rigorous way.
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There is also a private certification of "social
and environmental performance" of for-profit
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companies called B-Corp. Companies get the
certification by receiving a minimum score
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on the assessment and by integrating B Corp
commitments into their governing documents.
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This will probably be the topic of another
video.
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The good news is, the companies that genuinely
put their business at the service of the people
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and the planet get the good-will of the market
place and end up doing well by doing good.
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As Interface’s late CEO put it, “there
no amount of slick advertising, at any cost,
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that we could have done that would have created
the good will that this effort has created.”
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If you found this video useful and are wondering
how you can help me create more, you can do
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it on Patreon. In a nutshell, you make a pledge
that will apply to each new video I will post
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in the future and you get perks like your
name in the credits, access to my drawings,
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a character drawn after you in the next video,
etc. It helps me cover the production costs
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and stay independent.
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If you can’t or don’t want to, that’s
totally fine. You can always subscribe, give
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this video a like and share it with your friends
and colleagues. Thank you to all the patrons
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who make these videos possible and thank you
for watching!
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