With the growth of climate accounting and ESG reporting, more organizations are recognizing their role in sustainability. Reporting on GHG emissions, water consumption, and other environmental efforts are all necessary steps toward a more sustainable future, however, savvy businesses are also demonstrating their commitment to improve society as well as reduce their impacts on the environment and the communities they operate.
This is where the ‘S’ in ESG comes in with corporate responsibility and philanthropy initiatives.
Corporate responsibility (sometimes known as corporate social responsibility or CSR) refers to the initiatives and policies that corporations implement that are intended to have a positive influence on the world. As the precursor to ESG, CSR helped companies to start taking ownership of their impact on society, and there is still a lot of crossover between CSR and ESG to this day.
Corporate philanthropy is an element of corporate responsibility, in which organizations give back through charitable contributions such as donations, volunteerism, sponsorships, in-kind donations, and more.
Here are 3 reasons why corporate responsibility and philanthropy are critical to your ESG strategy:
Stakeholders Care About Companies Making a Difference
Stakeholders are increasingly voicing how much they value corporations that positively interact and give back to their communities.
When organizations prioritize corporate responsibility and philanthropy as part of their ESG strategy and ESG reporting, they can create positive impacts on society and improve how stakeholders see and value their efforts.
Organizations need to embrace social efforts to demonstrate to their customers, employees, shareholders, and the communities they operate, that they are not only giving back but doing so with purpose.
Employees Value Organizations with Purpose
It’s no secret that organizations have been struggling recently to find and retain employees. One of the reasons behind this may be the traditional focus on profits over people or purpose that many organizations still follow.
Studies show that nearly 70% of employees say they wouldn’t work for a company without a strong purpose. So, it’s no surprise that companies more focused on the bottom line than the positive impact they could create are struggling to build and maintain a happy workforce.
At FigBytes, many of our charitable giving and social initiatives are employee initiated and managed. Employees care and want to make the world a better place. And organizations that embrace corporate philanthropy by implementing social initiatives can foster greater employee engagement, satisfaction, and retention.
Focusing on the ‘S’ May Have Financial Benefits
It makes sense then that if consumers, employees, and other stakeholders are paying more attention to corporate responsibility and action, focusing on the ‘S’ or social initiatives aren’t simply good for society and the world but also for profitability and stock price.
Stakeholder-focused organizations equally prioritize profits with the wants and needs of their employees, customers, suppliers, business partners, investors, local communities, the environment, and society. Studies show that these more socially-conscious companies had the highest growth in stock price over the past 20 years and have historically seen higher returns. When organizations evolve their focus, the financial benefits follow.
Despite this, corporations still only make up 4% of total charitable contributions in America, leaving a huge opportunity for organizations to still realize reputational, employee, and financial benefits by implementing social initiatives like fundraisers, corporate sponsorships, volunteer programs, and more.
Companies need to embrace corporate responsibility and philanthropy as a critical part of their sustainability strategy and ESG reporting, to not only help influence positive change in the world but also effect real organizational benefits.
Need help measuring and sharing your social impacts? The FigBytes Philanthropy Solution helps take your corporate purpose from promise to performance with tools to measure your charitable contributions and improve your community impact.