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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Corporate social responsibility holds the company, shareholders and public accountable for every social decision they make. Consumers are more aware today of companies that care about their social responsibility and will go out of their way to take their business to these specific companies. These high standards that consumer are holding companies to are making them more self-aware. This way they are always making the right decision to help the environment. By engaging in Corporate social responsibility companies are enhancing society rather than damaging it. Not only is it going to benefit the environment but also the company. It will help employees and customers feel more connected to the world around them.

Before a company can start thinking about being socially responsible, they first need to make sure they are taking care of their shareholders. This can help them grow their business to the point where they are able to give back to society. With that being said, CSR is usually set by the larger corporations. Making it more of their focus since they are in the spotlight and will get back lash by customers if they are not socially aware.

  Now more than ever, people are deciding which companies to do business with based on how much they put into their corporate social responsibility.  According to Business News Daily, “To illustrate how critical CSR has become, a 2017 study by Cone Communications found that more than 60 percent of Americans hope businesses will drive social and environmental change in the absence of government regulation. Most consumers surveyed (87 percent) said they would purchase a product because a company supported an issue they care about. More importantly, a whopping 76 percent will refuse to buy from a company if they learn it supports an issue contrary to their own beliefs”. As discussed in class Clorox and Dannon were two of the companies that will be compared to Colgate and analyzed for their sustainability initiatives both internally and externally.  It will explain the different strategies that each company takes to implement their ideas into helping society become a better place for everyone. The company that will further be looked into is colgate, where it will be related back to the readings discussed and shared in class. Also, the internal benefits of CSR will be mentioned.

Implementing CSR is a way for a company to stand out and show how much they care about its consumers, stakeholders and the environment. Since companies are worried about consumer perceive them, they also make sure to do business with supplier that have a responsible policy. For some people, seeing this responsibility is the only way they will deal with a company. By saving on the resources being used and or wasted, not only are they saving the environment but also saving money. Being a business that is socially responsible will help in finding a loyal staff. Which in the end will also help save money since you don't have to worry about finding new workers and training them.

Another big part of having CSR is constantly keeping up with it. It is not a one time thing, you must innovate and find new ways to work on the process.  Burke says, “To keep your CSR efforts thriving, you need momentum and passion, and that have to come from the top. Your stakeholders need to be fully committed. Focus on responsibilities that are meaningful and relevant to you, your clients, your employees, and your partners." According to “Business benefits of corporate social responsibility”, here are some reasons that CSR is beneficial to a company:

• Better brand recognition

• Positive business reputation

• Increased sales and customer loyalty

• Operational costs savings

• Better financial performance

• Greater ability to attract talent and retain staff

• Organizational growth

• Easier access to capital

• Access finance

• Attract positive media attention

• Reduce regulatory burden

• Identify new business opportunities

To begin, an internal benefit to a company is having better brand recognition. When a company is focused on making their customers happy and bettering the world, they will be recognized more. Their own customers will want to always talk about them, giving them more exposure. A positive business reputation will also put the company on top. Whenever another business wants to collaborate, they will think of the company that has been said to have a great reputation to do work with. This will result in increased sales and customer loyalty. Being on top of your CSR will help with many of the operational costs. The company will not be using as much equipment as it would be if they were not focused on being sustainably responsible. With all these savings, they will see better financial performance. If the work environment is pleasant and a place that is trying to be effective with the environment, it will attract workers and also be able to keep them for a long time.  Meaning the company will not have to waste time and money on finding and hiring new workers. Which will lead to organizational growth. With all the trust the company is building with other business' and people, they will have easier access to capital and to be able to acquire money or resources that is needed. Not only will they access to capital but access to finances as well. Since, investors are more likely to back a dependable business. As they are working on their CSR, the company will be able to grab the media's attention when they are taking part in activities around the community. This gives the company more positive publicity. Having a good relationships with local authorities can often make doing business easier.  Last, focusing on CSR can be beneficial in identifying new business opportunities, and for development of new products or services.

As previously noted, social responsibility is important for both the company and the customers. Now a day more than ever, business' are putting more money into the idea of having a “greener tomorrow”. They are even hiring a full time team to just focus on the topic of CSR and to make sure it is built into their business model. This resulted in CSR being expanded into departments and into the culture of the companies. Although CSR has been given more recognition and attention, it is difficult to put a value on it. This all depends on how much money a company is willing to put towards these issues as it can become expensive to keep up with.

To be able to effectively implement CSR, companies must know the amount of money it will take and the effects that it will have. Depending on the what the money is being used for and the amount of resources that will be needed. This includes the actual money that is going to be spent and the time they will need the employees to work. To be able to fully estimate the cost of having CSR, companies would have to change it up and not take the traditional approach but instead by measuring the “green approach”. This would include thinking about future customer loyalty and the social value it could bring to the company. Opportunity cost would be another aspect to consider while planning CSR activities. When speaking about opportunity cost in “ The benefits and costs of corporate social responsibility” by Geoffrey B. Sprinkle, he claims that “ For example, if the $2 million contribution to Doctors Without Borders could be used for another project that generates a 12% return, then this cost (lost after-tax profit) needs to be considered” (Sprinkle 4). With that being said, it shows how difficult it is to show what will be more important whether it's the social or economic outlook.

This way of thinking was shown in the video “Ray Anderson: The business logic of sustainability”. The founder of the company interface, Ray talks about the idea of sustainability and the all the benefits it has gave his “green” company. I=P*A*T was discussed to be the formula to determine environmental impact. As the owner of the business, Ray wanted to focus on changing this formula to be I=(P*A)/T, where the T which usually stands for technology would have less power over the environment. Instead of having to change the entire carpet, the company decided to just change it by taking square cuts out. This way it was more sustainable and saved time and money. While using more natural resources, it had an enormous impact on return on investment. By interface putting in time and effort into their social responsibility, it has given back and showed an increase in their cash flow. Having an increased cash flow is not the only internal benefit they are receiving but also free advertising. Anderson pointed this out when he said “Good deeds to receive coverage on local and national radio and television, and be the subject of articles in newspapers, trade journals, and magazines”. Speaking on TED, was another way Ray Anderson was able to bring more publicity to not only his company but to how important being socially responsible.

The case “The Dannon Company: Marketing and Corporate Social Responsibility” discusses the different approaches Danone took to implement CSR. The company focused on three areas which were people, nature and nutrition & health. They were able to use scientific knowledge to better public health by directing it towards nutrition and dieting.  This brought about more value since it was able to target different types of consumers. These consumers included children and ones in different regions and different social classes. The program provided about €16 million in financial support, which was beneficial to millions of the company's stakeholders. Not only was Danone focused on bettering the company, but he put in effort on developing his employees.  A way that he did was by having a tool called the Danone Way that managers used to see the performance in different outlets and how much was being applied towards social issues.

After several years, the company was referred to as “Dannon” and one of the issues discussed was whether or not they should encourage a CSR program. The senior leaders did not find value in investing in CSR activities. Regardless of this, the senior director of Marketing decided that putting the resources towards advancing the brand and promoting their social mission would be beneficial. Another argument that was brought up was the fact that making the investment would make it difficult to measure the opportunity cost and ROI. There was also the possibility of Dannon not doing CSR correctly and bringing negative publicity to the company.

Although not many companies choose to implement CSR, many of them do believe that to have CSR it need to fit the management culture in a firm. Which means a large amount of money cannot be used in only one department that will not use if for any social good. This all starts from the top level executives. If there is a plan to with purpose to be used for a social good, it can be adopted by the lower management and be successful with the right support and direction.

The case “A Road Map for Natural Capitalism” mentions how we could cut down on electricity to help the environment and save on money. Discussed is the “whole-system” idea, where they build a system that would be cheaper and can be used in multiple ways. For example, if companies started using premium-efficiency motors instead of ordinary motors, or used electronic ballasts that automatically dim lamps to match the daylight instead of ordinary lightning ballasts. Making these changes would cut down the $220 billion a year electric bill in half. Also giving back more than 100% in after tax return on this investment. Starting off with small changes could be the most beneficial move a company can make. With all the money they will be saving they can start making even bigger changes that will drastically improve the environment.

While reading the case “The Clorox Company: Leveraging for Green Growth”.  Clorox was pushing for the concept of Brita, the water filter. It was during the time of the recession that Brita paired with Nalgene, so it gave the company leverage over advertising. They marketed it in a way where they let the consumers know how much money they will be saving and helping the environment by using a filter instead of plastic water bottles. It was a way for Clorox to be able to positon Brita into the idea of sustainability.  This resulted in a better brand image for the company, since now they showed consumers that they care about the environment and their social responsibility. Another “green” product Clorox established was Burt's Bees, which was marketed as being all natural and ethically produced.  Their goal is to become a 0 waste and 0 carbon company by the year 2020. This was possible due to the fact that the company operated in LEED certified building and operated on renewable energy. Another brand that Clorox marketed towards their sustainability goal was Green Works. It was line of products that were promoted for using a less harsh chemical. Made with 95% natural ingredients that are known by most, it gives the everyday user a chance to know what products they are using in their household. Launching this product line was deemed successful for Clorox. With these three different lines, Brita, Burt's Bees and Green Works, Clorox was heading into the more sustainable direction. This gave the company more recognition and rewards. These rewards included the Natural Product Association certification and the Foreign Policy Association for CSR.

As mentioned before, Colgate's CSR report will be further looked into. Colgate sells products such as toothpastes, toothbrushes, mouthwash, and dental floss. They are a part of the American brand called Colgate-Palmolive. The first time they sold oral hygiene products was in 1873. More than half of all households purchase Colgate. They are profitable in every aspect and “Colgate has a global market penetration of 67.7% and a global market share of 45%. Despite this, it maintained the highest growth rate of all brands in the survey, with 40 million new households purchasing Colgate-branded products in 2014”.

According to Smart Energy Decisions, the 2017 Colgate Corporate Social Responsibility and Sustainability report, the company stated that they have outperformed their goal that was set in 2020 to reduce absolute greenhouse gas emissions from the “manufacturing of 25% vs. a 2002 baseline” (Smartenergydecisons).

“In 2017 Colgate has reached over 950 million children with oral health education since 1991. They have achieved 27 million healthy activity minutes, reached 60 million people with handwashing education and had 9 million pets adopted since 2002. Their Save Water conservative campaign was activated in 70+ countries and reached about 3 billion people. They've upcycled over 7 million pieces of oral care packaging with Terracycle. Improved the sustainability profile in 82% of new products and product updates. Have made 42% of their packaging material weight from recycled resources and 80% of their packaging is recyclable. As for the planet, Colgate has reached 373 thousand people with education about water and sanitation and health and hygiene education since 2013. There was a 47% reduction in water use per of product manufactured vs. 2002. 44% reduction in waste sent to landfill per ton of product manufactured vs 2010.  28% reduction in greenhouse emission vs 2002, 31% reduction in energy intensity vs. 2002. Last, 70% of palm oil, palm kernel oil and palm oil derivatives purchased are certified” (Smartenergydecisions).

These numbers show how much of an effect Colgate has made not only on the environment but on millions of people as well. They have forever changed their lives for the better. This shows the unselfishness of the company and how much they truly care about making the world a better place. As of now they are doing more than enough and they don't plan on stopping. They have a strategy that started from 2015 and was set until 2020. This project is said to “maintains our emphasis on People, Performance and Planet with focused, measurable goals that align with the Company's business objectives.” ( Smartenergydecisions).

Colgate has been known to use a large amount of water and to also contaminate it, which is considered to be wasteful and harmful to the environment. Another thing they need to be careful with is their factories generating carbon dioxide into the atmosphere. A suggestion would be to come up with a way to use less water by finding an alternative. As for the factories, they can open more of them around the world in areas where they are well known.

In the long run, investing in socially responsibility has been proven to be worth it. Not only is helping the environment but it brings more recognition to the company focusing on CSR and it turns out to be profitable. Also, it's a chance to bring in loyal customers. Although in the beginning it may seem like you are not getting anything in return, giving it time will show how beneficial it is. These socially responsible actions will have many companies follow in their footsteps.

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