5 reasons why CSR investment is best for your business

Now more than ever, consumers care about spending their money right. As many as 77% of US customers prefer to purchase products from brands that benefit society. Yet it is not only your average millennial consumer that wants to see what your company stands for. In fact, 73% of investors state that efforts to improve the environment and society influence their decision-making process. If you want your business to appeal to more consumers and investors, look no further. This blog explores implementing a corporate social responsibility (“CSR”) plan is integral to your business. 

What is CSR?

CSR is a type of qualitative, business self-regulation. It aims to integrate positive social, environmental, and economical change into a company’s policies, practices, and decision-making. It is a broad concept that can be depicted in many forms, including, but not limited to philanthropy, environment conservation, diversity and labour practices, and/or volunteerism.

CSR is similar, but not identical to, environment, social and governance (ESG), which uses measurable, quantitative criteria to assess a company and determine whether they are worth investing in.

Why is CSR so important?

CSR is a company’s way of showing that they care about more than just income. CSR commitments serve as keystones for corporate culture. At the same time, they offer employees, investors, and consumers insight into the company’s ethos. Given that these key stakeholders are becoming increasingly wary of spending their money right, CSR is a great way for a company to show that they share their stakeholders’ values and convince them that they are worth spending money on. 

5 reasons why your business should invest in CSR

  • Attract employees

People want to work for companies which share their values. And with millennials, who are increasingly socially and environmentally conscious, entering the workforce and making up 75% of it by 2025, socially responsible employers will soon be the most sought after. Companies with CSR policies are therefore better positioned to attract young talent.

Furthermore, the morals and values of a company and how socially responsible it is are directly related to how it will treat its employees. Companies conscious about their social, environmental, and economic impact are more likely to treat their employees socially, environmentally, and economically better. Thus, even those employees who don’t necessarily have CSR at the forefront of their minds can be indirectly influenced by CSR, as it seeps into a company’s culture.

CSR is not only important for talent attraction, but also talent retention. As many as 83% of millennials would be more loyal to a company that helps them contribute to social and environmental issues. A key reason for this is that CSR makes employees feel proud of their work and know they are making a more significant impact. This sense of pride and accomplishment may encourage employees to work more efficiently and to a higher standard, driving the company forward and creating a positive work culture. This broader sense of purpose associated with work may also give employees the drive to progress up the career ladder and personally contribute to the company’s growth. Implementing CSR initiatives can therefore make for a more productive workforce and encourage talent retention, too.

  • Attract quality customers

People want to make change, but often feel like their personal actions don’t have a huge impact. Conversely, corporations have the unique position of having money, power, resources, and people to make change possible. Consequently, by supporting socially responsible companies, consumers know their money is having a positive impact on the world. It is therefore unsurprising that now more than ever, consumers are speaking with their money and supporting brands that share their values.

By establishing itself as CSR-friendly, a business is more likely to attract the average modern-day consumer over a competitor which lacks CSR policies. Such a business is therefore better positioned to gain trust from consumers, which may encourage customer loyalty in the form of repeat business or recommendations. This may not only increase the company’s profitability, but also its reputation. And the calibre of customers is also likely to strengthen the company’s brand.

  • Attract investors

Since investments in companies with CSR policies are often lower risk, governments are more willing to grant them operational licenses and permits. They are also subject to less scrutiny from regulators and less pressure from activist organisations. This means that businesses with CSR policies have greater operational freedom, which makes them more attractive to investors. As such, it is easier for them to secure funding so as to tap into new markets and sectors. Furthermore, studies predict that companies with CSR initiatives will eventually start to outperform their competitors as they are more likely to withstand economic downturns. This adds weight to the conclusion that such companies are more attractive to investors.

  • Greater profitability

Positively impacting society whilst continuing daily operations can help boost a company’s brand image. Research shows that companies that are depicted as philanthropic and socially conscious tend to have higher profitability, valuation and equity returns. Furthermore, they tend to be more efficient and cost-effective. For example, Nestlé announced that by 2025, it will spend up to $2.1 billion in order to shift from virgin plastic packaging to food-grade recycled plastics, as well as develop other sustainable packaging solutions. This will not only reduce its carbon footprint, but also lead to reduced compliance costs across its various operating locations, particularly those which have stricter laws related to the use of plastic packaging. This helps to explain why some of the world’s largest companies, such as Nestlé, spend millions of USD on CSR-related initiatives each year.

  • Create A Positive Impact on the World

Corporations have the money and power to make the world better. And with climate change, poverty, racial injustice, and economic hardships on the rise, businesses are increasingly being calling upon to play their part. Consumers, regulators and activists are placing surmounting pressure on companies to harness their resources and implement CSR-related initiatives, arguing that they should feel a sense of responsibility to positively contribute to society.

It is all too easy for SMEs to sit back and let corporate giants take the lead on CSR. After all, they possess greater power and resources due to their size. Yet even with their relatively limited resources, SMEs can make a positive impact, too. For example, they can sponsor meals or volunteer at women’s shelters, marketing themselves in the process. Actions such as these show modern day consumers that the company cares and is not merely attempting to rob them of money in the short-term. At the same time, they highlight to employees, investors, clients and shareholders that the brand possesses a global mindset akin to corporate giants such as Google, Microsoft and Intel. This desire to positively impact the world can help SMEs differentiate themselves from a highly competitive market and may even inspire competing firms to follow suit and heal the world.


This blog highlighted several key justifications for CSR investment. Companies with CSR plans can compete for, retain and make productive employees. They are more appealing to consumers, and their alignment with public policy can attract investors, making it easier to tap into growth opportunities. Implementing a CSR plan can therefore increase a company’s profitability whilst strengthening relationships with key stakeholders.

Yet introducing a CSR plan does so much more than make money. It sends a message to the market. It shows employees, investors, clients and shareholders that your brand possesses a global mindset. It signals that your brand has a long-term vision. And it shows bravery and vision as a business leader.

So, what are you waiting for? If you run a SME, you can implement a CSR plan today. Strengthen your brand and sleep better at night knowing that you have made the world a better place.

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