Since 2013, the New Zealand life insurance firm Asteron Life has worked with charity United Way on a Trans-Tasman initiative to give back to the community. In 2016 Asteron was recognised with the 'Award for Corporate Social Responsibility' from the Human Resource Institute of New Zealand. The company had contributed more than 1000 hours of volunteer work to the community; it had also experienced a boost to its own internal employee engagement levels, which is one of the happy side effects of a good Corporate Social Responsibility (CSR) scheme.
Let's take a look at the anatomy of effective CSR, and some other Kiwi businesses doing good things.
More than good deeds
At its core CSR is about an organisation operating in a way that benefits society. This might involve using ethical labour practices, lifting environmental awareness, volunteering, or other philanthropic work.
However as a recent global report on sustainability and consumer expectations by Nielsen shows, a business' commitment to societal issues is also directly lined to its brand performance.
Translation? CSR is good for business.
As Senior Vice President of Public Development and Sustainability at Nielsen, Grace Farraj puts it: "Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. Brands that fail to take this into account will likely fall behind."
How social responsibility drives performance
Organisations that are active within their communities share values with consumers.
A consumer's decision making process is guided by their trust in a brand, which in turn is influenced by a company's reputation. This means that, to retain customers, businesses need to prove that their involvement with community projects and environmental issues isn't just for show.
CSR also affects how much people are willing to spend on a product: 66 per cent of consumers surveyed by Nielsen indicated they are willing to pay more for sustainable brands.
Beyond that, as Asteron Life experienced, when a business involves staff in the community it positively affects internal culture. As a result of increased employee satisfaction and engagement levels, companies with strong CSR programs also boast better performance and service quality.
What does this mean in numbers?
A Verizone and Campbell Soup study indicated the following:
- Effective CSR programs can add up to 20 per cent to current revenue.
- The valuation of stakeholder relationships is increased by 40 to 80 per cent, adding an average of $1.28 billion to the bottom line.
- A company's brand and reputation value goes up over 10 per cent of its total worth.
- Employee turnover can be halved and productivity improved by more than 13 per cent.
How to create a good CSR program
To build and support a successful initiative, a company needs to look at three things: purpose, relationships and transparency.
Firstly, an effective CSR programme should reflect an organisation's voice. It should reinforce the overall purpose of a firm and focus on core competencies instead of dispersing into multiple directions.
Secondly, building strong relationships can play an important role in establishing a good reputation. It's not enough to claim good CSR if the public don't believe it. Partnering with people and projects who are already involved with the issue a business wants to tackle can help create a truly effective program.
Lastly, living in a technologically connected world means that organisational attitudes to both internal and external stakeholders inevitably come to light. As Tim Maleeny, chief strategy officer at Havas Worldwide, puts it: "If you're not putting out your story, one of your employees will, either deliberately or by happenstance."
So to avoid criticism and consumer backlash – or to promote an organisation's values to the public – open and transparent communication is critical.
A Kiwi business leading by example
BNZ has one of the most prominent CSR programmes within New Zealand's business landscape. The organisation has two main focuses: the environment and the community.
Since 2010 the bank has been carbon neutral and has put an emphasis on reducing emissions as much as possible. Together with Kauri2000 Trust, they also have the BNZ Kauri Bond Issue scheme in place, which sees 100 kauri seedlings planted for every Kauri Bond issued.
On the community side of things, BNZ has partnered up with the Salvation Army and Aviva to improve financial literacy among Kiwis, something that is directly aligned with their core competency (finance). The bank also closes its stores and offices for two days a year so that employees can volunteer in their community. Additionally, the bank has developed a toolkit to help consumers protect themselves against scams.
The main takeaway from the CSR efforts of both Asteron Life and BNZ is that adding value to local communities needs to focus on aligning core values, competencies and employees.