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Transforming Sustainability into a Competitive Advantage by Anna Stella 16 December 2022

Now more than ever, many businesses acknowledge the need to be socially responsible. They’re responding to calls to do good for the long-term and short-term betterment of the environment. And corporate social responsibility (CSR) is everywhere.

 

A growing number of companies have a sustainability program in place. While there is no standard measure as to what falls under corporate social responsibility, any action taken by a company to give back to society is considered CSR. Incorporating social responsibility in an organization isn’t mandatory; however, it can help companies differentiate their marketing, further their growth strategies, and ultimately make more profits. 

Nielsen conducted a study in 60 countries to determine the potential effect of CSR. Out of the 30,000 consumers studied, 66% said they would pay more to brands that prove to be socially responsible. In another US-based study, Cone Communications found that 87% of Americans are willing to spend more on something if they see a company engaging in issues they care about. In essence, sustainability initiatives are a win-win for businesses. According to HBR, companies’ primary motivators to create CSR programs are sustainability, moral obligations, reputation, and operating license. 

CSR is a great way to do good for the world while growing profits. Here are the top reasons why a company should incorporate sustainability in its long-term marketing strategy.

  1. Gain a competitive advantage

Studies have shown time and time again that a sense of purpose drives employee motivation. CSR can provide that. A strong program helps to create meaning, a sense of community, and passion among employees. 

There are other ways CSR initiatives can offer a competitive edge to companies, too. When a company has inspired employees and a good working environment, it can attract the best talent in the industry, a substantial competitive advantage during times when labour is in short supply. It can also help drive more referrals. Recent studies show that 85% of executives are more inclined to refer out to companies with a stronger purpose than one which doesn’t.

  1. Get more customers

When a company prioritizes engaging in sustainable practices and commits to making sustainable products, it can attract sustainability-conscious customers. Different demographic groups, Millennials in particular, are happy and willing to spend more on products that have sustainable ingredients or sourcing and outsourcing procedures.

A recent study found that 73% of consumers are willing to change their habits and invest in things that are good for the environment. Not only that, but sales of sustainable products have grown by over 20% since 2014. Sustainability can increase market share, help break into new customer segments, and ultimately increase the bottom line.

  1. Win new investors

Investors are in business to make good returns. Still, research shows that they care about more than just profits. A 2016 report by Aflac shows that investors prefer companies that engage in social responsibility. From the study, 61% of investors view CSR as “positive corporate ethical behaviour which also helps reduce risk of investment.” They believe that CSR companies are transparent and less likely to commit financial fraud.

  1. Increase customer engagement

Businesses can use CSR to engage with customers. Many CSR projects involve interacting directly with members of a community. And most members of these communities are customers, or potential customers, of the business.

Businesses can use this opportunity to engage community members and get feedback. By finding out what consumers want their company to improve and acting on it, they can build trust and help drive word-of-mouth marketing. When customers feel valued and that the company is interested in listening to them and giving back to society, they are likely to tell their friends and colleagues and encourage them to be part of the business community.

Customer engagement is crucial to company success.

  1. Increase brand loyalty

Competition is intense in today’s world. Businesses need to go the extra mile to stand out. One way to get noticed is to incorporate CSR into their business practices. A CSR project can help raise awareness of different societal issues, make progress on those issues, and help a company become positively associated in customers’ minds. Customers will be able to see the company in a new light and associate them with positivity and a force for good in the world.

For a brand to succeed and retain its customers, it needs to invest in building trust with them. CSR can be an excellent way for a company to do that. A well-structured CSR marketing strategy can help brands earn trust and loyal customers from their good reputation. Built trust can help a brand grow and increase its reach since people identify the company with positivity.

  1. Talent acquisition and retention 

New talents are also most attracted to companies dedicated to improving the world. A company engaging in CSR helps signal a more robust culture and a clearer vision for the future while adding a sense of purpose. Clients and prospects alike perceive companies engaging in CSR as more caring, compassionate, and striving to treat their employees well. 

More and more people are interested in improving the world. CSR can help companies create a sense of purpose for the work they do, and by creating this, a positive work environment forms, and employee productivity can be improved. CSR helps motivate employees by giving them the feeling that their work is contributing to something larger than themselves; a sense of purpose for the work they do.

  1. Protect your brand

Reputations take years to build and only moments to destroy. A CEO’s worst nightmare is waking up to find their company in the headlines because of a scandal. Nobody wants to be labelled as that CEO who put his employees to work in an unsafe environment or allowed an oil spill to happen on their watch. 

To avoid damaging the company’s reputation and losing customers, a company can invest in CSR. A well-known CSR program can help insulate a company from the damaging impacts of a scandal or even prevent one altogether.

  1. Connect with the younger demographics

Millennials and Gen Z have no plans to back down from fighting for a greener planet. Excluding sustainability from your digital marketing strategy is a mistake. By including sustainability into your marketing strategy, you can cater to this growing pool of potential customers.  

Not only do the younger generations make up a significant and growing consumer base, but also a large piece of the workforce. Top talent from this generation can be choosy.

They care deeply about environmental activism, social responsibility, and philanthropic efforts. To have a shot at hiring the best, you’ll need to put your commitment to social issues, the planet, and sustainable values at the forefront of everything you do.

  1. Sustainability Benefits the Planet

It’s easy to lose sight of the forest for the trees. Of course, there are plenty of business reasons to incorporate sustainability into your practices and marketing strategy. But even if it benefits you, it isn’t trite. It’s important. Consumers are willing to pay more for companies that take sustainability seriously for a reason; there is no tomorrow without a healthy planet. 

Bringing environmentally friendly strategies into your business, like the use of digital platforms over paper, virtual events over in-person, or sustainable packaging, make creating a marketing strategy around sustainability easier. Actions speak louder than words, don’t just talk the talk when it comes to sustainability; walk the walk. There’s more at stake here than profits. When consumers can tell that sustainability is truly part of your company’s values, they’ll reward you.

 

Courtesy https://digital.cpaireland.ie/issue/december-2022/transforming-sustainability-into-a-competitive-advantage/

 

 

 

 

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