The global coronavirus pandemic shows the importance of CSR
Corporate social responsibility (CSR) has grown in importance over the last 20 years. It’s no longer an ‘added extra’ for a business to be socially accountable in visible and practical ways. Businesses must be conscious of the impact they have on every part of society, including social, economic, and environmental.
And in today’s connected world, business behaviours have never been more scrutinised and judged by consumers and other stakeholders. The strength of feeling that consumers have towards specific behaviours of businesses is supported by data.
How important is CSR during coronavirus?
Now that we are in the middle of the COVID-19 pandemic, there is even more scrutiny over how companies behave, react, and act. Coronavirus is a crucial CSR issue for businesses, and how they react in a crisis towards the community, the country, and wider society is having a major impact on their reputations.
Businesses that show responsibility and compassion, and can actively demonstrate this to consumers, will be in a much better position to succeed post-pandemic. In other words, CSR is more vital now than ever before.
Leading data science consultancy, UK-based Barcanet was commissioned by YouGov just before the pandemic broke. The survey asked consumers from all around the country what behaviours they look for in businesses and which they care more about.
The survey results foreshadow consumer reaction to high-profile companies that, during the pandemic so far, have been judged lacking in CSR. Public reaction to certain corporate practices via social media has been sharp and definitive during the coronavirus crisis. For example, Richard Branson’s plea to the Government to use taxpayers’ money to bail out Virgin Atlantic met with a furious online response.
Which corporate behaviours do consumers care about most?
The survey gives a good snapshot of the CSR company behaviours that consumers care about the most.
- Paying tax – whether a company pays the full amount of tax is vital to positive public perception. This came top in the business behaviours that consumers believe should be taken, with 88% of respondents marking it as the issue they care the most about.
- Paying employees – how a business pays its workforce and gender pay equality is also important to many, with 81% citing this as an issue they care about.
- Paying a real living wage – more than half (52%) of respondents say they care the most about this issue, with 83% citing it as important. As of April 2020, the national living wage imposed by the Government for people over 25 is £8.72 per hour. However, the real living wage is £9.30 across the country, and £10.75 for people living in London.
- The way companies treat suppliers – more than a third (39%) of respondents say that whether businesses pay their suppliers on time is important.
- CEO pay – around 75% are clear that the CEO of a business should be paid fairly and in line with the rest of the business.
- Environment – 74% of consumers expect companies to clearly show their commitment to reducing CO2.
CSR strategies include many compnay behaviours
At the beginning of 2020, the way that businesses impact society through their behaviours was already under the spotlight. And it’s these behaviours that form a company’s CSR strategy or programme. Today, CSR is about far more than ensuring employees are involved in charity work. It’s the whole DNA of a business, their internal and external behaviour and how much good (or bad) they are seen to do to society as a whole.
Coronavirus has ramped up this consumer focus on CSR actions from companies. Businesses that have thrown themselves into ways to practically assist the community in this crisis are higher in the public estimation. For example, companies like Brewdog very quickly pivoted their entire business to shift from beer to hand sanitiser when supplies across the UK were extremely low.
This kind of demonstrable action is key to consumer perception. And while COVID-19 and its lasting impact are having an effect on corporate strategy, businesses that want to thrive after the crisis passes should place equal importance on CSR practices.
Negative consumer perception could hit the bottom line
Any business owner following the news throughout the coronavirus crisis will be aware that consumers are boycotting businesses that they perceive have treated either their employees, their suppliers, or the wider community poorly. In March, companies including Wetherspoons and Sports Direct came under fire for not paying employees and suppliers, for example. This damage to their reputation could very well heavily impact their bottom line when lockdown is over, and consumers are able to vote with their wallets.
This unprecedented crisis shows that it is vital for businesses to demonstrate CSR behaviours that match with the ethical values of customers. Everyone, from consumers to investors, regulators, and suppliers are analysing the behaviour of businesses at a local, national, and even global scale.
And businesses that fail to meet the CSR expectations of these different groups will lose out to competitors. It could cause long-term damage lasting into the future, particularly as there is little doubt the country will be dealing with an extremely challenging economic situation for a long time to come.