Can Environmental and Social Responsibility Boost Business Profitability?
The question stands for many, “Can you be socially responsible regarding the environment while increasing profits.” From large corporations to small and medium sized entities, many companies are looking for ways to implement sustainability and increase their corporate social responsibility (CSR) s while retaining their bottom lines.
Corporate social responsibility (CSR) is the effort a business makes to take responsibility for its actions as part of its business model and how its actions impact the environment and society at large. Truly, and said simply, CSR is meant to compensate the business’s for having a positive effect on the environment and community. A corporation can take environmental responsibility by reducing the company’s carbon footprint with clean energy options. Recently, there has been a spike in businesses of all sizes and locations adopting policies for the good of the world. As a business you can contribute without suffering economically. In fact, CSR initiatives can even save you money. For example, after General Mills installed energy monitoring systems to reduce energy usage, they saved $600,000.
Studies have shown that companies that fully integrate CSR into their operations can expect good financial returns on their investments. According to a recent study posted on the Social Science Research Network (SSRN) and referenced by Forbes, “CSR is more than a capitalist having a heart; it creates significant value, increases innovation and benefits the bottom line. It’s good for business.” Companies integrating CSR have been shown to increase sales and prices as well as reduce employee turnover.
Businesses as well as consumers play a vital role in ensuring a more sustainable future by eliminating waste and applying “conscious consumer” behaviors. Today’s consumer is more aware of the effect their purchasing decisions can have on the environment. If you’re not doing anything to achieve responsible business practices, odds are your customers are considering purchasing from your competitors and may have sought alternative options that offer goods and/or services that support and have positive social and environmental impacts.
Research from GreenPrint found that nearly 80% of consumers are more likely to purchase a product labeled as environmentally friendly, with 77% of those surveyed saying they are concerned about the environmental impact of products they buy.
Overall, companies that demonstrate actions to improve the environment may see an increase in profit margins, a positive boost in your public image (which will gain respect and traction amongst the community), and it may even improve the attractiveness of your business to investors.
Sources: https://greenprint.eco/greenprint-sustainability-index/ and https://www.business.com/articles/can-you-make-a-profit-and-be-socially-responsible/
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3549827
Categorized in: Work
This post was written by Elevate, Inc.
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