Yaneek Page | CSR can improve small business performance in 2024
As a small-business visionary, finding new roads to improved business performance can be one of the most daunting tasks, yet there is a simple and proven path that is within reach of every entrepreneurial strategist, and that is CSR or corporate social responsibility.
There’s compelling evidence that doing good, beyond creating jobs and producing goods and services, is a sound investment that delivers sustained results. Here are some interesting statistics every small-business owner should contemplate:
• Various studies across multiple markets have shown that on average, over 70 per cent of consumers are motivated to purchase from companies committed to making the world a better place. On a personal level, I intentionally purchase from companies that have dedicated programmes that promote and strengthen youth entrepreneurship, apprenticeships and women’s economic empowerment.
• A whopping 50 per cent of consumers are willing to pay more for a product or service if the business prioritises sustainability and climate-crisis mitigation. Of note is that Jamaica is particularly vulnerable to climate change as scientists believe that this year, Kingston became one of the first cities in the world to experience climate departure, where the hottest temperatures on record will become the new normal while record-breaking heat is expected year over year hereafter.
• When it comes to access to funding and partnerships, approximately 73 per cent of new-age investors have said that efforts to improve the environment and society contribute to their investment decisions. For them, sustainability and reinvesting in the communities they extract from are no-brainers.
• CSR programmes have also generated unexpected benefits such as new business lines because the deep engagement with communities creates connections and channels with prospective customers that allow companies to better understand and meet their needs.
• As a proactive risk-management control, 80 per cent of executives report using CSR strategically to reduce reputational risk to their companies. Being known as a business that does good in the community can mitigate negative blowback from myriad mistakes, product failures, or poor decisions, especially in the age of social media.
• When it comes to talent acquisition and retention, the research is even more compelling across markets when the perspectives of the younger generation are considered. For example, several studies have revealed that the youngest members of the workforce, such as Gen Z, are generally more concerned about positive impact on the world than salary and benefits.
• One study found that Gen-Z is the “first generation to prioritise purpose over salary”. According to the researchers, “they read mission statements and values documents to select where they work, and they want their employer’s values to match their own. They expect consistency and authenticity and will call you out, often publicly, if they don’t see it. They will leave companies they believe are hiding or putting too much spin on bad news, ignoring their negative environmental or social impacts, or that have toxic workplace cultures.”
• At the leadership level, nearly 90 per cent of executives believe a strong sense of collective purpose that serves the best interest of the communities and countries in which they operate drives employee satisfaction.
While this data is not specific to Jamaica, it underpins the solid business case for sustained investment in corporate social responsibility that is agreed in offices, shared work spaces, and boardrooms across the world.
The advantages of social responsibility programmes though not well documented are well established in our local market, and several organisations have reported via their annual reports and annual general meetings substantial returns on their programmes and initiatives that go beyond philanthropic tokenism.
In the case of Jamaica, the social, economic, and environmental conditions demand it because businesses can’t expect to enjoy sustainable profits extracting from communities without pouring into their development and well-being. Prioritising the well-being of Jamaica and its people is not only ethical practice, but serves the best interest of shareholders as well.
For businesses that are interested in increasing profitability, expanding their customer base, deepening customer loyalty while drastically improving employee satisfaction and talent acquisition, an investment in CSR initiatives may be a good strategy to explore in 2024 and beyond.
There is a commonly held belief that CSR is a cost that only larger companies can afford; however, it is time to reframe that perspective to recognise that value to be derived from mutually beneficial ‘do good’ efforts. Small businesses are never too small to make an impact and to be rewarded for that worthwhile commitment.
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Yaneek Page is the programme lead for Market Entry USA, and a certified trainer in entrepreneurship.yaneek.page@gmail.com