What drives CSR?

Many global corporations now run social responsibility and sustainability programmes. But why? What are the benefits to companies and how has society changed to influence their decisions? 

So why do it?

There is increasing consumer pressure in the modern market place. One news story can be detrimental to both the image and value of a company. In the early 1990s, clothing giant Nike received global coverage of poor working conditions in its factories. There were protests against the company, and the value of the business declined.

Consumers and investors demand that a company is ethical in its business practices. Participation in or sponsorship of socially responsible activities can boost the corporate image. Association with big events or ethical projects can also increase media coverage, making consumers more aware of a brand. Favourable news stories can have a positive impact.

This doesn’t just affect potential customers: employee perceptions improve. People are happier and prouder to work for socially responsible companies. This leads to higher quality applications for vacancies and more effective employee retention. The workforce may also be more willing to “sell” the company outside of office hours. 

Some CSR programmes don’t only increase revenues indirectly by improving a company’s image. Reducing an organisation’s carbon footprint will probably lower costs on water and energy bills. Vocational training in the local community may boost employment rates and therefore the spending power of potential customers.

Corporations and sport

For decades now, corporations have been sponsoring major sports events. Formula 1 cars, stadium naming rights, the modern Olympics – contracts can run in to the hundreds of millions of dollars. But what are corporate organisations doing in sport and development? Here are some examples:

• As well as being an Olympic partner, Samsung sponsors the Oceania Australia Foundation (OAF). Working in some of the most deprived communities in the region, the OAF raises awareness of the health benefits of physical activity.
• British Petroleum (BP) has a significant business presence in Azerbaijan. It has also sponsored the country’s athletes and, since 2012, its Paralympic team.
• Women Win promotes female empowerment through sport. Since 2011 it has been part-funded by financial giant Standard Chartered.

NGOs wanting to partner with the private sector need to have a good business case. How do your development goals align with a corporation’s business goals?

Don’t just look for funding opportunities – look for mutually beneficial partnerships. Which companies are selling products which are useful in your projects? Which are looking to break into the market in the country where you work? Do the outcomes of your project (e.g. more knowledge about health, better financial literacy, a wider interest in sport) create potential customers for certain sectors?

Demonstrate that your work adds value to a private sector partner’s bottom line. The most successful collaborations are between partners whose aims, experiences and resources are complementary.

The fourth article in this series will look at sports organisations and their role in CSR.