With Great Power Comes Great Responsibility

What it means to be socially responsible?

The Harvard Business Review defines CSR as the idea that a business has environmental, ethical, philanthropic, and economic responsibilities to the society that exists around it.

According to this definition, a company is considered socially responsible if it ensures that its operations are environmentally sound, all decisions are based on ethical principles, it invests philanthropically in the community, and justifies all financial decisions with its commitment to the common good.

Of course, CSR was not part of the original definition of a company. For a long time, companies were concerned with making money for their shareholders and top executives. The shift toward CSR will be slow, given how large companies have become and how many moving parts must change to fully embrace CSR principles.

Giving back to the community is just one piece of the puzzle, and arguably the simplest.

Being environmentally friendly doesn’t mean taking advantage of carbon offset programs that allow you to operate normally. You actually have to stop operating in a way that harms the environment – a big change for most manufacturing companies.

Making all decisions ethically doesn’t happen overnight, either. Many companies have embraced diversity principles in recent years, but few have created a truly friendly workplace culture for people from diverse backgrounds. A quick search for “VP of DEI resigned” turned up no fewer than six high-profile resignations, all of them People of Color. In most cases, companies hired experts without actually changing their culture, setting the expert up for failure.

Philanthropic engagement can take the form of a volunteer program, a grant program, a matching gift program, or a combination of all of these. While I don’t claim that companies run these programs to the best of their ability, most large companies have such programs in place.

Financial decisions are an important piece of the CSR puzzle that I don’t think companies themselves or we as consumers pay enough attention to. Where are companies investing their funds? What are their parent companies or their subsidiaries doing? Who are they donating to politically? This discussion has intensified during Pride month, as it was revealed online that some of the companies that publicly support Pride month are also donating heavily to anti-LGBTQ politicians and campaigns. But it’s a year-round issue, and it’s an area where there are significant growth opportunities for all businesses.

Now, you may be wondering, what does this mean for businesses?

After all, they’re there to make money, and all those CSR initiatives I just outlined are cutting into revenue. This is where you, the consumer, come in.

Every time you spend your hard-earned money, you’re making a choice. It may not feel like it, especially if you’re just popping into the Wawa to grab a soda or getting distracted by the dollar section at Target. But every time you swipe your credit card, you’re making a decision with your money. You’re telling businesses that you approve of their business practices when you buy from them.

Given the decision fatigue most of us feel on a daily basis, we don’t want the added responsibility of putting extra thought in or researching what we spend our money on. We just want to take what we need and move on.

But more and more people are taking notice, and that’s what’s driving companies to pay attention to their CSR practices. Millennials may have started this trend, but Generation Z has taken it and run with it. Research shows that Generation Z is guided by social impact when making purchases and choosing their workplace, and they look for companies that serve society because their values are based on community and support.

Of course, it’s not just Generation Z that embraces this concept. My father is a Boomer, and he’s been boycotting Coca-Cola for years. I don’t even remember why, I just know that he refuses to buy their products. And I respect that; he also puts his money where his mouth is, which is a great way to lead by example and live out his values.

Take Back Your Power

And what does that mean for us? In my opinion, it gives us a lot of power. Companies depend on you to make their money. If you mess with their money, you have a greater chance of making a difference. So get out there and put your money where your mouth is and assert your power! Research which companies you spend the most on and where they’re on their CSR journey. Do you like what you see? Keep spending money! Are you concerned about what you see? Spend your money elsewhere, and encourage your friends and family to do the same.