Here’s why Corporate Social Responsibility is important for a successful business

By: Simran Bawa

“Businesses cannot be successful in societies that fail,” said Paul Poloman, former CEO of Unilever. Many new-age conglomerate firms today justify Paul’s assertion and serve their philanthropic purpose.

The concept of Corporate Social Responsibility (CSR) was introduced with a noble cause in mind. It meant giving back to the community and adding positive social value to it. Even today, many successful industrialists like Ratan Tata conduct massive charity drives voluntarily.

There are some people who believe that CSR is merely a marketing gimmick. But you will be surprised to know that over 21 thousand crore Indian rupees were raised from 17,677 Indian corporates through CSR alone. This amount was then utilised in diverse sectors like conservation of the environment, development of rural areas, education and many more. So, these companies have truly justified UK’s former prime minister, Tony Blair’s statement, “Prosperity is best achieved in an inclusive society.”

Moreover, gimmicks do not bring prosperity but charity does. And ethics play a much bigger role in charity than reputation because people do not care about brands that do not care about their community, no matter how reputed they may be. To name a few, HDFC Bank, Infosys Ltd, JK Lakshmi Cement are some invincible brands that strengthened their names in Indian markets by realising their social responsibility and creating an infallible brand reputation.

It is not an unknown fact that CSR contributes to 40 per cent of brand reputation. No company would risk its hard-earned reputation over a CSR publicity stunt. Not many know that CSR reports of a company also attract investors. Economically speaking, charities made through CSR impact the demand and supply chain too, thus creating a sustainable business model for the company.

So, corporates get to benefit from CSR in terms of brand recognition, customer loyalty, dominance in markets, employee retention rate, growth in capital, heavy investments and increased global support. Thus, incorporating a CSR based business model is a win-win situation, both for the corporation as well as the community and this leaves no place for ordinary gimmicks.