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Coronavirus Is Questioning Companies’ Corporate Social Responsibility Resolve

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As society struggles with the profound impact of coronavirus, corporations have a responsibility to step up and help support the government in taking action. As the department within companies which has direct relationships with non-profit organisations and the communities they are part of, Corporate Social Responsibility (CSR) professionals should be on the front lines helping with funding and solutions of any kind.

The way large companies are responding to this crisis represents a defining moment that will be remembered for years to come. For example, 38 years ago in Chicago, 7 people died from taking poisoned Tylenol pills. It was a rare and localised crisis, but Johnson & Johnson took the decision to pull all the Tylenol from every store, taking a huge loss in order to avoid even a single additional death. People still talk about that decision. People who weren’t even born at the time are still studying that case in business schools.

A great many corporations talk about having a social purpose and set of principles and values, or about how much they care for their employees and other stakeholders. Now is the time for them to make good on their commitments. Research suggests that people only truly believe that their company has a purpose and clear values when they see their leaders making a decision that sacrifices short-term profitability for the sake of complying to those values.

Another example of positive action is represented by the U.S.A. drugstore chain CVS which chose to go more deeply into health care and decided that it could no longer sell tobacco products and by doing so giving up $2 billion in revenue.

It is completely understandable that corporate leaders face pressure from investors and bankers to conserve cash and reduce losses, but neither of these categories are going hungry. Even retirees, who have seen their savings depleted, can expect to see stocks recover as long as they don’t sell during this initial panic time. Companies cover up the costs of restructuring, product failures, or acquisitions that go wrong all the time. It will be more than understandable if someone writes off their losses due to the coronavirus pandemic. Here are some things that companies can do to help their employees, small suppliers, health care providers, and communities.

Employees

What companies do to help their laid-off employees — above and beyond what is required or expected — will be remembered and repaid in increased loyalty, higher productivity, and a lasting reputational benefit for many years to come.

Continuing to pay wages, even at less than full pay, is one option. For this scenario we have Walmart, Microsoft, Apple and Lyft who have all made commitments to continue payments to hourly workers for at least the first two weeks of lockdown. This is essential not only as a matter of corporate responsibility; it will also substantially reduce the costs of rehiring employees when the economy returns to normal.

Lending money to employees is another option. Left on their own, many employees will turn to the exorbitant charges of credit card debt and payday lenders who will charge a 20%-plus interest rate at a time when corporations can borrow at 2% or 3%. That difference in interest rates can be the difference between bankruptcy and economic survival. Corporations should use their corporate credit and collateral to arrange low or no-interest loans to their employees. They should calculate employees’ take-home pay after payroll deductions, and ask their banks to make loans available equal to a month of net wages at 3% interest, guaranteed by the corporation. Employees could therefore pay the loans back over the next year out of their salaries when they return to work.

Medical Staff

Some parts of the world face severe shortages in basic medical supplies, but as a global company you have access to resources everywhere. The need for masks in China and South Korea has decreased considerably while it is on a upward trajectory in the United States and Europe. Companies should purchase and ship supplies from where they are available to where they are needed. They should look into their inventory of whatever they have that might help, send it where it will do the most good, and take the loss.

Encouraging mental wellness

Many companies, as well as state and local governments, recommend that those who can work from home do so. In addition, the Center for Disease Control in the United States recommends that all gatherings and events of more than 50 people be cancelled for the next eight weeks. This “social distancing” is vital to reducing the spread of the coronavirus but negatively impacts emotional well-being.

Thus, leading corporations are supporting mental as well as physical health. For example, Starbucks just announced it will expand mental health benefits to include up to 20 therapy sessions for all employees. Elsewhere, telecommunication companies have signed the ‘Keep Americans Connected’ pledge to make sure that individuals maintain access to connectivity.

Supporting small businesses

According to the Wall Street Journal, small businesses’ confidence has plummeted as a result of the Covid-19 pandemic. Some large corporations are stepping in to support small and medium companies during this difficult time:

  • Amazon announced a $5 million relief fund for small businesses in the vicinity of its headquarters;
  • Google is offering $1 million to organisations in Mountain View, California, impacted by the pandemic;
  • Billionaire Mark Cuban has been reimbursing employees who purchase lunch and coffee from local restaurants.

Although the ramifications of the Covid-19 impact have yet to be determined, it will continue to disrupt our now old way of living for the next few weeks and months. The corporate sector can help during this crisis by implementing strategies and initiatives that benefit society – as well as their long-term success – by supporting their employees, customers and the economy at large.

No one expects or requires major companies to take extraordinary measures to help their many stakeholders, but if they choose to take bold and creative steps now in order to deliver immediate support then that will define their future legacy.

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Sources:

https://www.csomagazine.com/csr/coronavirus-crucial-csr-issue
https://www.weforum.org/agenda/2020/03/coronavirus-and-corporate-social-innovation/
https://www.forbes.com/sites/afdhelaziz/2020/03/19/the-power-of-purpose-how-csr-should-be-acting-like-first-responders-to-tackle-coronavirus/#6c912c606dd3

CSR and Its Growing Importance

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It may come as no surprise that corporate social responsibility (CSR) has become a most for businesses all across the world. Organisations that are committed to CSR know that it leads to an enhanced reputation. It is of the utmost importance to establish a clear CSR strategy in order to assure the organisation’s competitiveness in the industry it’s doing business. This normally requires policies which integrate numerous aspects such as social, ethical, environmental, human rights or consumer concerns into daily business operations and the company’s core strategy.

Generally, companies are looking at achieving a positive impact on a community or society as a whole whilst also creating value for the business owners, its employees, shareholders and stakeholders.

In a study done by Kenexa High Performance Institute in London 2015, has found that organisations that had a genuine interest and commitment to CSR clearly surpass those that did not engage in such activities. Furthermore, the study has also revealed that CSR-orientated organisations had a higher level of employee engagement and also offered a better customer support service. At a corporate level, CSR brings a lot of positivity and optimism, even though at organisational level companies do not always accept their responsibilities for CSR, with plenty of businesses admitting adopting CSR purely as a marketing ploy.

At this moment in time, it is vital that we try and create a more sustainable form of capitalism if we are thinking about building a more inclusive, prosperous society and avoid the catastrophic climate changes that are getting closer and closer. The idea for CSR has been around for some time now, so how come it has become mainstream as of late?

The influence of Millennials on CSR policies

It is obvious to everyone that millennials are a growing force in the workplace. Young adults nowadays focus on a company’s impact on the environment and even urge these organisations to have a clear social mission.

Millennials are tech-savvy people, and they immediately research a company and are looking into its ethical and labour practices. Numerous millennials feel like it is their duty to make the world a better place to live in and they do not want, under no circumstances to be associated with companies which do not take responsibility for the world and the people in it.

Interestingly, in a recent Deloitte survey, it has been revealed that employee engagement is closely tied to the CSR reputation an organisation has. A whopping 70% of millennials interviewed have recognised that a company’s desire and commitment to CSR has influenced their choice to work for them. In just a couple of years, millennials will become the leading generational segment in the workforce, thus meaning that companies that wish to hire new workers will have and need to adopt CSR in order to keep the business going. Furthermore, millennials wish to actively partake in these social and environmental changes, not only consume products by companies who engage in CSR projects.

Huge companies have decided to engage in mammoth-sized CSR campaigns and that is great news. For example, Apple, which is a tremendously powerful company, can influence with its actions the whole industry. If an issue becomes a priority for Apple, it is clear that will make the ecosystem shift. At the same time, it is easier for big organisations to focus on CSR initiatives because they are less subject to quarterly pressures. It is easier to focus on long-term plans.

There is a definite need for big firms to commit to renewable energy and to lobby for the change in legislation that imposes harsher costs for fossil fuel buyers. There is also a need for big companies to commit to raise the minimum and to lobby for a change in minimum wage legislation. To say they’re not going to dump stuff in the river, or buy from those who do. The top 500 organisations’ revenues are worth nearly 37% of world GDP. Think about what would happen if we could convince 100 of them to go carbon-free and to take a less hostile view of their labour force?

An example of a better-pay practice is the behemoth Cola-Cola and its “5by20” programme. This initiative has been created to empower 5 million women entrepreneurs around the world by 2020. Recent research has indicated that empowering women can have a long-lasting effect and to name a few: increased revenues, more hired work, better-educated and healthier families – all of which lead to more prosperous and happy communities.

Whatever cause your organisation supports, be sure to be transparent and honest with your customers. Authenticity is the key to being successful at anything; otherwise, you will be labelled as deceitful and will lose the trust of your customers. Trust represents the most fragile relationship you could ever have. Once it’s gone, you’ll find it next to impossible to get it back.

In conclusion, corporate social responsibility is more than just a business trend or fad. Businesses that want to stay relevant to new generations and who want to help people in need around the world while increasing their own revenue and efficiency will benefit from embracing CSR.

Great People Inside provides easy-to-use tools and processes to attract, assess, match, select, onboard, manage, develop, benchmark and maintain workforces anywhere in the world.

Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It requires deep knowledge of your own organisation’s culture and a keen understanding of the candidate’s personality, strengths, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you find employees who can flourish and reach the highest performance required to constantly bring your company forward.

Request a free demo:

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Sources:

 

https://hbr.org/2018/02/more-and-more-ceos-are-taking-their-social-responsibility-seriously

https://www.financierworldwide.com/the-importance-of-corporate-social-responsibility/#.WoP3VtVubIV

https://onlinemasters.ohio.edu/why-corporate-social-responsibility-matters-in-todays-society/

https://www.entrepreneur.com/article/269665