Should corporations trim their CSR budgets in an economic slowdown?
Yesterday, I was asked to comment on this question by Dennis Schaal, Editor-In-Chief of CRO Magazine. Here’s what I told Dennis:
I believe that corporate responsibility is an ethos thats more about how things are done than how much they cost. At times like this, corporations and brands will need all the help they can get to be seen by consumers as priorities and authentically-practiced corporate responsibility will be an even bigger differentiator. (Plus, the direct cost of CSR is miniscule in comparison to the cost of marketing and operations thats why the ROI is so significant.)
Theres a business case for being more responsible regardless of the economic circumstance. Thats because corporations who believe in being socially and environmentally responsible can integrate and deploy CSR mandates within existing cost centers. For example, it doesnt cost anything for an HR department to include their companys CSR commitment and programs in existing or planned recruitment materials and internal communications. The ROI of this no-cost investment is better people, more innovation and higher productivity, reduced costs for recruitment, on-boarding and training. It also doesnt cost anything to ensure that a companys CSR commitment and programs is included appropriately in external communications to customers, consumers, investors, and other stakeholders. The ROI of this is clearer differentiation, stronger sales, better supplier and customer relationships, more consumer loyalty, and improved investor relations.
The biggest challenge is how to be seen as responsible when significant operational changes are needed. Theres no easy answer for a company thats had to downsize its operations in a local community. There a few ways to minimize reputational damage but these all involve earlier foresight and groundwork. For example, Michelin has a program called Michelin Development (in Europe and Canada) that provides loans to small and medium sized businesses with the aim of creating more jobs at a local level. Ultimately, this is of benefit if one of their facilities needs to be closed.
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Should you reduce your CSR budget?
By CB Staff
Yesterday, I was asked to comment on this question by Dennis Schaal, Editor-In-Chief of CRO Magazine. Here’s what I told Dennis:
I believe that corporate responsibility is an ethos thats more about how things are done than how much they cost. At times like this, corporations and brands will need all the help they can get to be seen by consumers as priorities and authentically-practiced corporate responsibility will be an even bigger differentiator. (Plus, the direct cost of CSR is miniscule in comparison to the cost of marketing and operations thats why the ROI is so significant.)
Theres a business case for being more responsible regardless of the economic circumstance. Thats because corporations who believe in being socially and environmentally responsible can integrate and deploy CSR mandates within existing cost centers. For example, it doesnt cost anything for an HR department to include their companys CSR commitment and programs in existing or planned recruitment materials and internal communications. The ROI of this no-cost investment is better people, more innovation and higher productivity, reduced costs for recruitment, on-boarding and training. It also doesnt cost anything to ensure that a companys CSR commitment and programs is included appropriately in external communications to customers, consumers, investors, and other stakeholders. The ROI of this is clearer differentiation, stronger sales, better supplier and customer relationships, more consumer loyalty, and improved investor relations.
The biggest challenge is how to be seen as responsible when significant operational changes are needed. Theres no easy answer for a company thats had to downsize its operations in a local community. There a few ways to minimize reputational damage but these all involve earlier foresight and groundwork. For example, Michelin has a program called Michelin Development (in Europe and Canada) that provides loans to small and medium sized businesses with the aim of creating more jobs at a local level. Ultimately, this is of benefit if one of their facilities needs to be closed.