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Should Businesses Practice Social Responsibility?
Should Businesses Practice Social Responsibility?
Should Businesses Practice Social Responsibility?

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CSR = Corporate Social Responsibility

Should Businesses Practice Social Responsibility?

read 5 min

The discussion surrounding better practices done by businesses and brands is definitely a growing topic. Huge names from all industries are implementing new goals to grow their business in consonance with moral values. For example, IKEA has released projects to display its sustainability ambitions for 2030.

Why is that a tendency? It might seem obvious that the world needs new practices to run towards a more sustainable and ethical future. However, implementing social responsibility goes beyond good intentions and clean consciousness. The way consumers interact with purchasing is every day more connected to their social values and eco-friendly habits. So, aiming for a socially responsible business is also a strategy for customer service. Keep reading to unfold this turning tendency!

WHAT IS BUSINESS SOCIAL RESPONSIBILITY

Social responsibility is summed up, by Investopedia, as means that businesses must take in consideration to benefit society. The actions taken can be related to ethical working habits, eco-consciousness decisions and even shareholder equity.  

As it relates to society, social responsibility is akin to an ethical framework that an individual or group follows while interacting with society and the environment. With each interaction, the goal is to leave a positive impact on society as a whole. And also important: showing to the customer that their business is putting efforts towards ethical conduct. Individuals can significantly change society for the better, but when businesses are socially responsible, it is possible to see positive change on a larger scale.

Businesses and corporations tend to have more money than a single person, so there is often less financial strain when they give back to their communities. Ideally, social responsibility would be a core tenement and woven into the structure of a company. For a company to have any success in its endeavors with social responsibility, it has to align with the original values. 

In other words, it must be a natural path that the company would have progressed to and consistent. Social responsibility is not merely a publicity stunt. It is a code of conduct that is employees use in daily operations. Yet, many brands are appropriating this discourse without actually changing their values. 

ARE BUSINESSES OBLIGATED TO BE SOCIALLY RESPONSIBLE?

In most situations, companies are never forced into being socially responsible. Social responsibility is a voluntary task. Each corporation will have its own interpretation of how to execute that task. Although businesses do not have a set obligation, we are seeing more consumers demanding action. As issues such as world hunger and climate change have made their way to the forefront, more people have placed a higher value on the social contributions of businesses.

According to BoF, 45% of apparel companies surveyed by McKinsey are looking to integrate more innovative bio-based materials. The reason is tightly connected to its sustainable features, which make a good impression, especially on Gen Z buyers. This shows that consumers are prioritizing environmental-friendly choices, even if it means paying more for them.

Young people have interpreted capitalism to be a system that thrives off of the exploitation of classes. The younger generation also places blame on capitalism for the quick onset of our current climate crisis. Capitalism can be reimagined into a system that better serves the unique needs of the 21st century. However, businesses must first take accountability and incorporate social responsibility as a core value.

Also, looking through a corporate lens, the ethical and sustainable identity is prominent to bring more profit to companies in the next years. For example, E-textiles, also called ‘Smart Textiles,’ is projected to grow USD 15.36 Billion by 2030. That solution aims to produce fabrics and materials that are easily recycled and consume less water and chemicals. That is just an example in a sea of new propositions for a greener future. Therefore, it is expected to see social responsibility as a growing branding strategy. Especially now that technology is becoming a solution for many market pains

BE CAREFUL WITH IMPOSTORS

After all, being socially responsible seems to bring a good impact not only on the world as a whole but also on the company’s impression to the customer. So, you might wonder if this strategy is a good solution for many issues in the fashion industry, for example. That is because, of course, it brings a good impact on the planet and in the work environment, as well as on the customer success and sales force. 

Unfortunately, alongside companies that are truly bringing about ethical impacts, there are other companies that are choosing the strategy ‘fake it ‘till you make it’. You might have heard of greenwashing or whitewashing by now. Those two terms are related to symbolic efforts that companies falsely convey to the customer to bring about a good reputation.

However, this topic is being discussed more as the other side of the coin – that is, corporate social responsibility – is finding space in business conversations. That is why customers must pay attention before purchasing something aiming to bring an exemplary impact to the planet or the employees of a business. And companies should also display their methods and processes with transparency. As they say: Those who do not have what to hide, should not have what to fear.

EXAMPLES OF SOCIAL RESPONSIBILITY FROM BRANDS

Social responsibility comes in many different forms. Some companies choose to allow their employees to take the initiative while they provide financial backing. Gap is one of many companies that encourages its employees to give back to their communities by donating. Each brand underneath Gap Corporation has a program that will match each dollar donated by an employee to the same non-profit organization. 

Lego takes a different approach and instead focuses on its environmental impact. As a partner of the World Wide Fund for Nature (WWF) in the Climate Savers Programme, Lego is consciously trying to reduce its carbon footprint. The company has switched over to wind power and pledged to reduce product waste. Lego also files reports of its carbon footprint throughout the production and supply line to the Carbon Disclosure Project (CDP).

The Canadian athletic apparel company Lulemon has become a respectful name for making ethical and sustainable decisions in the past couple of years. In 2022, it debuted a collection using plant waste from beets and oranges instead of synthetic dyes. Also, the brand has partnered up with companies to develop polyester made out of carbon emissions, as well as plant-based fabrics.  

HOW SMALLER COMPANIES CAN GIVE BACK

The previous examples were amazing ways in which companies have tackled the task of social responsibility. However, these options may not be feasible for smaller brands. In the case of smaller brands, it might be easier to focus on more immediate things such as ethically sourcing materials and paying their workers a liveable wage.

Ethical sourcing looks like transparent supply chains in which workers are provided with adequate working conditions and benefits. Ethical sourcing can also apply to the materials themselves. Some companies prefer to be cruelty-free and avoid using animals in any part of the production line. Others may use recycled or organic materials. You may even see the adoption of all three models.

The point is: creating a socially responsible culture starts with simple steps, such as transparency, employee management and a sense of community. Do you take it into consideration when building your business? Those strategies can be consulted and shared by companies that scale entrepreneurs addressing the social impact, such as Fashinnovation Ventures. This knowledge can be grown together to build a more collaborative entrepreneurial mindset.  

WRAPPING UP THE IMPORTANCE OF SOCIAL RESPONSIBILITY 

Gen Z and Millenials are on their way to being the most influential generations as global demographics begin to shift. Not only will they make up a large portion of the workforce, but they will also be the main consumer population. In a survey conducted by Nielsen IQ, 81% of respondents felt that companies should take action to improve the environment.

We should also note that these consumers are also workers in these industries. Whether looking for a product or a job, their values remain the same. Companies should take some form of responsibility. This will gradually become standard practice as companies evolve to cater to the demands of their clients and try to attract new workers. Any company, regardless of scale, can always find more ways to be ethical. Knowledge about social responsibility is easily transferable, meaning that everyone can find value in it.

Like this article? Then you must read this one: The 7 Frequently Asked Questions About Fashion Social Business

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Credits:

Isabela Raposo

Relationship Executive & CRM

Author:

Isabela Raposo

Relationship Executive & CRM

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