The benefits of Corporate Social Responsibility (CSR) to brands and businesses

Corporate Social Responsibility (CSR) is standard practice for most business. No matter what the size, there is an expectation that business should do the right thing – from helping those in need to tackling issues that will make the world a better place. This expectation is almost becoming a demand, watched closely by all stakeholders, including shareholders, employees, customers and regulators/governments.

The concept of CSR is not new, but where it fits into a brand’s DNA has been transformed in recent years. For many, CSR started as a philanthropic effort, but as consumer expectations evolved, so has the role of CSR. Now many companies embed CSR in their business cycle, and it is no longer a “nice-to-have" but a “must-have” in business planning and delivery, in recognition that goodwill is enhanced when CSR and sustainability are done well. 

A social obligation

The “Brands and CSR Survey Report undertaken by the International Trade Mark Association (INTA) in 2019 revealed that organisations overwhelmingly recognise that it is their social obligation to positively impact global issues and give back to the community.  The survey also revealed that these efforts can contribute to brand value and brand loyalty, if they are made public.

84% of respondents agreed that CSR policies and adopting sustainability principles as an operational priority “constitutes good economic practice and will benefit a company and/or brand.” Further, almost 58% agreed that the absence of CSR policies and practices puts companies and brands at a disadvantage in the market. 

“We know that consumers increasingly want brands to be good corporate citizens, and, as such, CSR initiatives present enormous potential to garner consumer loyalty and trust, and bolster relationships,” said 2019 INTA President David Lossignol, Global Head of Trademarks, Domain Names and Copyright at Novartis Pharma AG, who spearheaded the creation of the INTA Presidential Task Force on “Brands for a Better Society”.

The Survey also highlighted that incorporating CSR policies and adopting sustainability principles can help businesses generate a positive reputation; build better relationships with clients, consumers, employees and the wider community; generate goodwill; raise awareness about issues and important challenges in society; and create and sustain trust in the brand.

Building trust and goodwill

The results of the Survey are reinforced by the 2020 Global Web Index report which revealed that 43% of those between 16 to 24, who aren’t even aware of what CSR is, are willing to pay a premium for a brand that has a positive impact on the environment or society, while the number of consumers who would pay more for eco-friendly products has risen from 49% in 2011 to 57% in 2019.  The report also showed that 68% of online consumers in the US and the UK would or might stop using a brand because of poor or misleading CSR, highlighting the importance for businesses to not just engage in CSR initiatives but integrate a central message of positive societal or environmental change to help build trust and goodwill. 

An exemplary example of a UK business putting CSR at the centre of their work is The Timpson Group where the one of the secrets to their success as the UK’s leading retail service provider is their commitment to recruitment of marginalised groups within society, particularly ex-offenders. The Group believes that by offering people an alternative to crime, and enabling them to break the offending cycle, they can make a real difference in society.  While CSR initiatives may help build profit, Timpsons reminds us that guiding companies with a conscience isn’t just a good business move, it also helps raise awareness, and encourage social change.

"Brands for a Better Society"

INTA responded to the results of their Survey by establishing the new “Brands for a Better Society” (“BFABS”) Committee, which researches and analyses brand involvement in advancing CSR principles in business and brand development and protection.  The Committee is chaired by Jessica Murray, Director of Intellectual Property and CSR at Toms Shoes Inc., which was established on the founding principle that it would improve lives by doing business.  Tom’s mission is to donate a pair of shoes for every pair they sell and has resulted in the donation of over 60 million pairs of shoes to children in need. Profits are then used to assist the visually-impaired by providing prescription glasses and medical treatments, to provide 'safe' drinking water and build businesses in developing countries to create jobs. CSR is not an “add-on” for Toms, it is the core of their business.

The Pro Bono sub-committee of the BFABS Committee, chaired by Kate O’Rourke of Mewburn Ellis, works to promote pro bono initiatives including the Trade Mark Clearinghouse, which INTA has launched in the USA and Latin America.  The Clearinghouse enables the CSR commitment of INTA member law firms to provide services free of charge to individuals, enterprises and non-profit or charitable organisations that might not otherwise have access to legal assistance. 

Bottom-line benefits

Social responsibility, beyond making the world a better place, also benefits companies in their recruiting and consumer marketing efforts. The Nielsen Global Survey of Corporate Social Responsibility found that more than 60% of people surveyed “are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact” and two-thirds would rather work for such a company.  

The findings of a paper published by the Institute for Operations Research and the Management Sciences (Rui Albuquerque, Yrjö Koskinen, Chendi Zhang (2019) Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence. Management Science) further support the theory that businesses choosing to engage in CSR have higher profit margins and valuation, but lower risk.  

Closer to home, the UK’s own Department of Business and Innovation concluded that “Businesses increasingly see that responsible business is not only good for society but can deliver bottom-line business benefits in terms of: staff recruitment and retention; managing risk in supply chains; driving innovation and productivity; and opening up new markets.”

Behaving ethically during a crises

2020 has been a challenging year with the impact of Covid-19 and consumer behaviour may have been altered permanently by lockdown. Businesses have also been trying to adapt.  A survey by global commerce services company PFS revealed a clear trend amongst consumers to be loyal to businesses that have behaved ethically during the crisis with 52% of all consumers agreeing that they feel greater loyalty towards brands that effectively communicate with them and are showing how they are helping people during this time. Furthermore, 54% of UK online shoppers say that are less likely to spend money with brands and retailers that treated their staff poorly during the coronavirus.

The studies referred to in this article all show clear evidence that CSR initiatives increase brand recognition, enhance brand image, and ultimately grow brand value. In the 21st century corporate social responsibility is not just a “nice-to-have”, but today it is a “must-have” for consumers and for society, and it’s good for business as well.