It is a sentiment that has been growing among consumers for several years now. Consumers want to know that the businesses they support have corporate social responsibility and that the company’s beliefs align with theirs.
In the past few years, it has gotten to the point where it is not okay to stay quiet. In fact, consumers will be upset if you do. As a business owner, there are times when you must be vocal in your support or opposition of a cause.
In the past few weeks, the Russian invasion of Ukraine has brought this marketing truth to the forefront.
What is Corporate Social Responsibility?
Corporate social responsibility, also known as CSR, is when the business holds itself accountable to its stakeholders and the public. Sometimes it’s referred to as corporate citizenship.
According to Investopedia, “To engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment instead of contributing negatively to them.”
To consumers, the need for corporate social responsibility is essential. According to Harvard Business School Online, 55 percent of Americans believe it’s important for companies to “take a stand on social, environmental, and political issues.” At the same time, 77 percent of consumers want to buy from a company committed to making the world a better place.
Types of Corporate Social Responsibility
According to Pacific Oaks College, there are four fundamental types of corporate social responsibility.
Environmental Responsibility – When a business dedicates itself to practices that better the environment. Practice such as recycling, solar power, waste reduction, etc. For ideas on making your business more environmentally responsible, check out this previous post.
Philanthropic Responsibility – When a business gives back to a community or national charity. Usually, the cause that the company donates to aligns with the personal beliefs of the business and its employees.
Ethical Responsibility – When a business makes decisions based on what is fair and right and respectful.
Economic Responsibility – When a business makes decisions that prioritize what is good over the highest potential profit.
Examples of Corporate Social Responsibility
Russia’s invasion of Ukraine has brought to the forefront companies who are fulfilling their duties of corporate social responsibility. It is also showing those that have failed to do so.
To show its corporate social responsibility, Airbnb didn’t have to do anything except go with the flow. They waived their fees. Someone came up with the idea to book Airbnb locations in Ukraine. They found it was a quick and easy way to donate money to the people of Ukraine. The idea caught on. When Airbnb got wind of it, the company simply announced it would waive its service fees.
Then, Airbnb took it a step further and decided to offer free short-term housing to up to 100,000 people fleeing Ukraine.
Airbnb may not have come up with the original idea. However, the company was smart enough to build on it to create more goodwill among its customers.
Plus, the company received tons of free marketing as one of the first companies to take extra measures to show support for the people of Ukraine.
Microsoft gets credit not just because it ceased sales and operations in Russia. But it also joined Ukraine in the fight.
In a blog post on March 4, the company said it was working to protect Ukraine’s cybersecurity and helping the country’s officials defend against Russian cyberattacks.
Other Companies Chipping In
Hundreds of other companies have announced they have ceased operations in Russia. Companies like BP, ExxonMobil, and other fuel companies have stopped buying Russian oil.
PayPal, Visa, American Express, and Mastercard have stopped accepting payments in Russia. While Disney and Warner Bros. say they will not release films in Russia, Netflix has stopped streaming services in the country.
Companies that Have Failed at Corporate Social Responsibility
The worldwide response has been swift and decisive, which is why the outliers are garnering plenty of bad press, and it may be difficult for them to recover after all is said and done.
After most American and European fuel providers said they would not purchase Russian oil, word came out that Shell had purchased 100,000 metric tons of crude oil from Russia.
The response on social media was quick and harsh, leading Shell to quickly backtrack and say it would donate the profits to help with the humanitarian crisis in Ukraine.
Even after Shell promised to donate profits, commenters didn’t trust the company, questioning whether Shell would truly donate all the profits and whether the company was sincere in its support of Ukraine.
The damage from this misstep may hurt Shell for many years to come.
McDonald’s, Coca-Cola, Pepsi, KFC
Several fast-food companies and major soda companies like Coca-Cola and Pepsi continued to operate in Russia until recently. That led to social media outrage with hashtags such as #BoycottMcDonalds, #BoycottCocaCola, #BoycottPepsi, and #BoycottYumBrands.
The companies eventually caved to the pressure from outside forces and closed down operations in Russia, but it may be another case of too little, too late.
While caving to social pressure may not always be the best choice for your business, you cannot ignore the public.
You need to weigh the pros and cons of any social issue and decide if taking a stand in something you’re compelled to do. Is it in the best interest of your company?
Customers are looking for brands with a moral compass. They want to know that the businesses they support see the difference between right and wrong. While not all situations are black and white, there will be times, like this one, when you will find not taking a stand is the worst choice of them all.
Written by Erika Towne