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Corporate Social Responsibility (CSR) is no longer just a buzzword; it’s increasingly becoming a vital part of companies’ overall strategy. 81 percent of millennials think it is important that the companies they work for engage in social responsibility. And they might have the right idea.
The impact that CSR can have on a company extends past warm-fuzzy feelings and a positive impact on different causes. It has also been proven to improve workplace collaboration and productivity, advance talent-retention efforts, and increase brand loyalty.
Sole focus on the bottom line isn’t enough to maintain a competitive advantage. That’s why companies are shifting from the standard bottom line to the triple bottom line: economic propensity, environmental stewardship, and social progress (profit, planet, people).
Not sold? Check out these four successful companies that do CSR right and reap the benefits of their hard work.
Since the beginning, TOMS has set their social initiatives as a top priority. After traveling to Argentina and seeing the hardships children endured growing up without shoes, founder Blake Mycoskie was inspired to create change.
The centerpiece of TOMS is the One for One® business model: For each pair of shoes purchased, a pair is donated to someone in need. The company has since expanded past shoes. They sell coffee, eyewear, bags, and more. Each item is associated with a different cause – from supplying clean water to communities around the world to providing eye care to people in need. In fact, TOMS has helped to provided more than 335,000 weeks of clean water in six different countries and has restored sight of over 400,000 individuals.
But TOMS’ social initiatives don’t stop there. It’s clear they thought through everything from supply chain operations to investing in their employees. With a focus on ethical manufacturing practices, enabling a high quality of life for employees, and ensuring sustainable materials are used in products, TOM’s really nailed the “people” and “planet” portions of the triple bottom line.
So, what about profits? TOMS is a private company, so we can’t actually know how profitable they are. But we do know that in 2014, the company was valued at $625 million. Not bad.
The REI Co-op was founded in 1938 – before “corporate social responsibility” was even a term. Though they weren’t thinking of CSR at the time, the founders set the perfect stage for the company’s social responsibility efforts to grow with the company. And that’s exactly what happened.
The first distribution center in the U.S. to accomplish both Net Zero and LEED Platinum certification. Giving nearly 70 percent of profits to the outdoor community. Dedicating a portion of profits to help restore the environment. Employee volunteer programs. These are just a few things REI has achieved (and continues to advocate) in the social responsibility space. It’s no wonder they were voted a Fortune “Best Company to Work For” 21 years in a row.
Their social and environmental initiatives coupled with their co-operative business model seems to pay off. In 2017, REI recorded over $2.6 billion in revenue. They paid out nearly $122 million in dividends to their members and still had over $30 million to reinvest in the company.
Ben & Jerry’s
Ben & Jerry’s, the iconic ice cream company, started forty years ago in Burlington, Vermont. Founders Ben Cohen and Jerry Greenfield quickly saw their small business grow into the ice-cream giant it is now and realized they didn’t want to run their business like a typical big corporation.
So they started doing business their own way. From requiring that the highest paid employee couldn’t make more than five times as much as the lowest paid employee to ensuring there were no artificial growth hormones in their products as early on as 1989. The company has also been known to take part in social activism for a variety of causes like climate change and racial justice.
Perhaps the most impressive aspect of Ben & Jerry’s corporate social responsibility is the company’s ability to maintain its values even after the company was sold to Unilever for $326 million in 2000. The founders attributed this to the fact that their social initiatives were imbedded in their brand. When the board of Ben and Jerry’s voted for Unilever to buy the company, Unilever bought the goodwill, the brand, and all of the social good that the founders had built into it. As a result, the company – though owned by the global giant – still operates with social responsibility in mind.
Ben & Jerry’s financial success is pretty self-explanatory. How could the company that invented cookie dough ice-cream not be successful?
A trend with all of these companies is that they each chose a cause from the get-go and formed their business around it. Each of them have dual value propositions: a customer value proposition and a social value proposition. These companies, along with countless others, are proof that businesses can be a powerful force for driving social impact while generating profits.