Understanding Social Responsibility in Today’s World
Social responsibility is the duty of all individuals and organisations to not affect harm on their environment and to be a positive influence within their society. It is important for both the individual and for businesses – and the weight of this responsibility needs to be shared equally by both parties. Businesses have the resources and the might to drive significant change, but the efforts of a single individual can be equally powerful.
Today, consumers are demanding more from businesses. More than one third of global consumers are willing to pay more for sustainability. And businesses are starting to listen. Many domestic and multinational companies, such as Unilever Indonesia, Nestle, Coca-Cola and Exxon Mobil have voluntarily adopted CSR programmes.
In this blog we discuss how consumers’ perception about social issues have shifted and compare the differences across generations, how personal social responsibility fits into CSR and what businesses can do do to effect positive change.
The evolution of consumer beliefs and behaviours
People care more today than ever before about the world around them. Issues such as gender inequality, climate change and social injustice are a priority not just for the minority, but a significant portion of society. 71% of Americans believe it’s either “somewhat” or “very important” for companies to make the world a better place.
There is a noticeable shift in how the different generations view brands and make purchasing decisions. Younger generations are putting greater effort into understanding a brand’s CSR efforts before purchasing from them: 41% millennials, compared to 27% of Gen X and 16% of Baby Boomers. Gen Zs expect brands to take a stand and to do so not for the sake of it but because it aligns with their overall purpose and mission. They also are discerning about how a brand portrays itself and whether its marketing contradicts its actions.
The role of the individual
Corporate Social Responsibility (CSR) is much talked about and is on the agenda of almost every company. But the individual’s part in CSR is often overlooked. Personal Social Responsibility is the individual’s responsibility to care for their environment and the society they live in. It starts with the individual and their choices. Individuals have the power to put pressure on corporations and governments if they believe, for instance, their practices harm the environment or if they do not treat their workers well. For example, in a national survey conducted in Spain in 2015, 49% of those surveyed were ready to boycott brands they believed to be irresponsible.
Corporate social responsibility
Corporate Social Responsibility (CSR): The term corporate social responsibility was coined in 1953 by American economist Howard Bowen in his publication Social Responsibilities of the Businessman. In the 1970s, as consumers became more aware of how some large corporations, in the pursuit of profit, have caused great harm to the environment. This started an awakening and the demand that businesses be held accountable for their actions. Corporate Social Responsibility can be organised into a pyramid with four layers, as published in an article by Dr Archie B. Carroll. The four layers of corporate social responsibility are as follows:
- Economic: To survive and thrive as a business
- Legal: To engage in activities that abide by the law
- Ethical: The company goes beyond what they’re legally bound to do and does what it is right because of a moral and ethical conscience
- Philanthropic: Going a step beyond just what’s right, but actively engaging in efforts to better the environment and social lives of the community a company operates in
What can businesses do to be socially responsible
Each of us has the moral obligation to act in the best interests of our environment and society. The added benefit for businesses is that they can increase their bottom lines by being environmentally and socially responsible. It improves their brand perception, helps to increase customer loyalty and retain customers, engages employees and builds internal culture, and wins the support of local communities.
For a brand to survive in today’s age and stay competitive, it’s key that they take steps to reduce their carbon footprint. For example, Gunung Prisma offers green steel solutions – steel that is made with hydrogen instead of coal – which drastically helps to reduce the level of carbon emissions during the production process.
To be a socially responsible, businesses first need to start within, implementing an other-centric culture internally. By having checks in place to ensure no discrimimnation happens during hiring or in the workplace, they can ensure they are promoting a diverse and inclusive culture. Companies can also look at social efforts to uplift the communities they are a part of, whether that is organising a fundraising event or volunteering at a soup kitchen.
Gunung Prisma, headed by Liwa Supriyanti, marshalled its resources to help the villagers of Nangela Village build a bridge, providing them access to the city and to essential amenities. Liwa is passionate about implementing change in her community and raising environmental awareness. She wields her position as Director in Gunung Prisma to effect such changes. Find out more about how Liwa engages in such efforts and how your business can implement these initiatives.