Companies are increasingly working towards corporate social responsibility and environmental, social and governance standards due to the advantages they stand to gain, according to a specialist in the space.
In a LexisNexis article, the company’s marketing guru, Lisa Thompson noted that meeting consumer ethical expectations can protect your bottom line, while commitments to corporate social responsibility can enhance your reputation.
According to recent analysis of sustainable consumers by Nielsen and cited by Ms Thompson, nearly half of US consumers said they would ‘definitely’ or ‘probably’ change habits to reduce their own environmental impact.
“Today’s consumers are less brand loyal than their predecessors”, it was noted, with Millennials edging their way towards becoming the consumer group wielding the largest power.
Ms Thompson considered the four questions previously identified that Millennials ask when looking for socially responsible companies:
These four questions are: does the company prioritize having a positive impact on local communities and the world? Is the company transparent about its corporate social responsibility efforts? Does the company actively invest in solving social problems and improving society? And is the company empowering customers to be involved – through donations of time or money – in the corporate social responsibility projects it undertakes?
The enhancement of reputation attributable to commitments to corporate social responsibility was also flagged by Ms Thompson, due to the findings of a global corporate social responsibility study.
People are less likely to do business with companies that are perceived as irresponsible, according to the research.
Ms Thompson said management of reputational risks “takes a proactive approach”, with ongoing risk monitoring able to help companies stay alert to potential threats that surface in the media.
Additionally, a commitment to meeting environmental, social and governance standards “offers an extra layer of protection”, she continued.
“If you’re invested in doing good, you build a loyal customer base.”
“Plus, you’re less likely to get blindsided by negative news”, Ms Thompson added.
“If an issue does come up – because we all know that third-party risk is a complex beast to tame – consumers will be more forgiving, especially when a company acknowledges the problem and quickly (and transparently) moves to correct the issue,” she said.
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